Private capex rises, but India’s credit growth cycle remains weak: Kotak
BusinessLine 1 hr ago·30 Sept 2026, 9:49 am
Private capital expenditure in India is showing signs of recovery, with companies increasing their spending on new projects. However, a recent report from Kotak highlights a significant disconnect. While the demand for funds is rising, the supply of credit is not keeping pace. Banks are still hesitant to lend freely, preferring to focus on existing borrowers and safer infrastructure projects rather than new ventures.
This divergence is crucial for investors to understand. It suggests that while the economy is moving in the right direction, the financial system is still cautious. The focus on greenfield projects and power infrastructure indicates a strategic shift, but it also means that broader corporate borrowing remains constrained. Investors should watch for future policy changes and bank lending trends to gauge how this credit cycle evolves.
Excerpt from BusinessLine
India’s private sector investment cycle has yet to translate into a strong credit growth cycle, despite fresh project loan sanctions rising 18 per cent year-on-year in FY26, with infrastructure, especially power, continuing to attract a major share of bank funding, according to a report by Kotak Institutional…Read the original at BusinessLine
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