Ecowrap - Is Credit Growth Hamstrung By Deleveraging? SBI Research
A vendor holds a bag full of Indian rupee banknotes of various denominations at the Margoa wholesale fish market in Margo, Goa. (Photographer: Dhiraj Singh/Bloomberg)

Ecowrap - Is Credit Growth Hamstrung By Deleveraging? SBI Research

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BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

SBI Research Report

FY21 is an outlier in India’s financial system with the onset of pandemic.

One direct corollary of pandemic in FY21 was a distinct slowdown in bank credit growth that has also continued into FY22.

We believe such low credit growth was a direct fallout of corporates rapidly deleveraging by repaying high cost loans through funds raised through bond issuances.

Our analysis shows that top 15 sectors, from more than 1000 listed entities, reported more than Rs 1.70 lakh crore of debt reduction in the pandemic year 2021.

Refineries, steel, fertilisers, mining and mineral products and textile alone reduced debt by more than Rs 1.50 lakh crore during FY21.

Click on the attachment to read the full report:

SBI Research Ecowrap 080621.pdf

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