Chennai: The industry has been witnessing a growing share of credit declines over the past decade, with slower growth under the leadership of the infrastructure sector in March 2025. Big companies have also been losing their outstanding credit share in the industry since the pandemic.
On March 25, credit in the outstanding sector rose 7.8%, compared with 8.5% in the same period last year. The infrastructure sector accounted for 33.6% of outstanding debt in the total industry, with a credit growth rate of 1.4%, down from 6.6% in the same period last year. Roads, telecom and port credits fell in March compared to last year’s growth. However, the power sector, which accounts for 51.6% in infrastructure, has grown by 6%, almost double the 3.8% increase observed in March 2024.
In the main sectors, outstanding credit for textiles, beverages and tobacco and chemicals slowed down, while annual growth in petroleum, coal products and nuclear fuels, base metals and metal products, engineering and building records.
The overall composition of bank exposure has changed significantly over the past decade. The industry accounted for 44% during the same period and has now dropped to nearly half, accounting for 23%. Even over the past five years, the industry’s share has declined from 31% in the fiscal year 20. Credit growth is now led by the personal lending sector, mainly retail, with the sector having the largest bank exposure at 34%.
Meanwhile, large companies have lost from 81% to 71% of industry credit in the past decade. Even in FY25, their share dropped to 70.7% from 72% in FY24.
The MSME segment usually continues to outperform the larger segment. MSME increased its share from 18% in FY20 to 29%.
The growth in the service sector grew at 12.4% in March 2025, with nearly half of the 23.5% reported a year ago mainly due to low credit growth for non-bank financial companies (NBFCs) and commercial real estate and partially alleviated by accelerated growth in computer software and Wholesale trade sectors.
