India’s corporate borrowing picks up as capex gains pace: Citi’s Neeraj Kumar

India is seeing a broad-based revival in corporate borrowing, with credit growth holding at 18-19% and demand picking up across working capital and capital expenditure, according to Neeraj Kumar, Managing Director and Head of Corporate Banking-South Asia at Citi.Kumar said the recovery in credit demand, which began around the goods and services tax (GST) rate rationalisation last August, has now spread beyond retail borrowers to corporates and multiple sectors. “The credit demand has become far more broad-based,” he said, adding that recent data continues to show credit growth at 18-19%.Investment is particularly strong across the energy ecosystem, including power generation and transmission, as well as data centers and the broader artificial intelligence (AI) ecosystem. Defence, residential and commercial real estate, and metals and mining are also seeing continued investment. Citi’s domestic client assets have grown by more than 30% over the past year, highlighting the increase in corporate activity.Cross-border merger and acquisition (M&A) is another area where banks are seeing greater demand. Kumar pointed to the large Sun Pharmaceutical Industries transaction as an example of global and Indian banks working together to structure and finance a major acquisition.Foreign banks, he said, can bring expertise in assessing and managing the risks involved in cross-border deals, while partnering with Indian lenders to build the overall financing package.Dollar funding has also picked up in 2026-27 (FY27) after a relatively quiet 2025-26 (FY26). More than a dozen transactions have been completed by large public and private sector banks over the past 60-90 days, with around $10-12 billion raised through bond markets and a similar amount through bank loans.Watch the full conversation hereThe Foreign Currency Non-Resident (FCNR) window has seen particularly strong activity towards the end of August. Kumar expects another $10-15 billion could have been raised during the final 10 days before the window closed, although the final numbers are yet to be released.For Indian banks, the combination of stronger corporate borrowing, rising CapEx and greater access to overseas liquidity points to a broader recovery in business financing. “So, it’s fairly broad-based across sectors CapEx that we’re seeing,” Kumar said.Catch all the latest updates from the stock market here

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