New Delhi, Oct 15 (IANS) The infrastructure, power and commercial real estate sectors in India are expected to remain the key drivers of funding activity in the second half of FY27, supported by ongoing project execution, healthy cash flows and continued public-sector spending, a report said on Thursday.
According to a report by Brickwork Ratings (BWR), lending to non-banking financial companies (NBFCs) is likely to be supported by strong demand for gold loans and loans against property
However, smaller NBFCs with significant exposure to the microfinance segment continue to face stress, it added.
India Inc's credit profile remained resilient during the first half of FY27 despite elevated crude oil prices, below-normal monsoon rainfall and tighter global financial conditions.
Data compiled from major domestic rating agencies showed that upgrades continued to significantly outnumber downgrades between April and September 2026, reflecting the strength of corporate balance sheets, according to BWR.
The report also showed that the ratio of upgrades to downgrades improved to 2.7 times in H1FY27 from 2.4 times in the corresponding period last year.
While the number of downgrades fell 11 per cent year-on-year, upgrades remained broadly stable.
“Infrastructure, power, capital goods, auto components and secondary steel led upgrades, supported by public spending and steady domestic demand,” said K. H. Patnaik, Chief Ratings Officer, BWR.
“Textiles, ceramics, diamonds and specialty chemicals faced pressure from weak exports and competition from cheaper imports,” Patnaik added.
Among rated entities, upgrades outpaced downgrades by 3.3 times with positive rating actions accounting for 35 per cent of all reviews undertaken during the period, the report said.
It also noted a steady improvement in corporate leverage, adding that debt-to-equity levels for companies declined to around 0.7 times in FY25 from 1.1 times in FY20.
Meanwhile, credit growth in the banking system remained robust.
Non-food bank credit expanded 18.8 per cent year-on-year in August, sharply higher than the 10.2 per cent growth recorded a year earlier.
In contrast, corporate bond issuances declined 34 per cent during April-June.
The services sector continued to be a major contributor to credit growth with lending rising 24.3 per cent during the period.
Meanwhile, commercial real estate emerged as a key driver, supported by strong office demand in major markets.
--IANS
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