New Delhi [India]: Corporate India will need to raise approximately Rs 115-125 lakh crore in debt between FY26 and FY30 to fund capital expenditure (capex), working capital, and the financing needs of non-banking financial companies (NBFCs), according to a recent report by Crisil.
The report highlighted that around Rs 45-50 lakh crore of this debt will be directed towards capex, while the remaining Rs 70-75 lakh crore will be utilized by NBFCs and for working capital requirements.
Key Debt Requirements and Sectoral Allocation
Crisil’s report stated:
“Corporate India will need to raise approx. Rs 115-125 lakh crore of debt between fiscals 2026 and 2030 to meet private and public sector capex.”
The infrastructure sector is expected to be the primary driver of capex, accounting for nearly three-fourths of the total investment during this period. It is also projected to contribute about 55% of the overall debt requirement through FY30.
Improved Credit Profiles and Leverage Levels
The report noted that corporate India’s leverage is at its lowest level in a decade, and the credit profiles of infrastructure assets have shown significant improvement. These factors create a favorable environment for continued investments in infrastructure and other sectors.
Challenges in Funding Ecosystem
On the funding side, India’s overall financing ecosystem, which includes banks, the corporate bond market, and external commercial borrowings (ECBs), is expected to grow at a moderate pace of 10% annually until FY30.
However, this growth rate might not be sufficient to meet the rising debt requirements, potentially leading to a funding gap of Rs 10-20 lakh crore.
The Role of Corporate Bond Market in Bridging the Gap
To address the anticipated funding gap, the report emphasized the potential of the corporate bond market:
“The corporate bond market has the potential to step up its funding contribution and help bridge this gap,” the report stated.
Strengthening the bond market through appropriate regulatory and policy measures could help reduce dependence on bank loans and ensure a steady flow of capital for infrastructure and other sectors.
Policy Support Crucial for Investment Needs
With India’s ongoing push for infrastructure development and the improving financial health of corporates, sustained policy support and diversified funding sources will be crucial in meeting the country’s investment needs over the next five years.
Summary
- Total Debt Requirement: Rs 115-125 lakh crore (FY26-FY30)
- Capex Allocation: Rs 45-50 lakh crore
- NBFC and Working Capital: Rs 70-75 lakh crore
- Funding Gap: Rs 10-20 lakh crore
- Key Driver: Infrastructure sector (75% of capex)
- Solution: Strengthening the corporate bond market and regulatory support