Industry’s Credit Offtake Slows

Chennai: Industry, which has been witnessing a shrinking share in credit offtake in the past decade, saw a slower growth in March 2025 led by the infrastructure sector. Large companies too have been losing their share in the credit outstanding of the industry since the pandemic.

On March 25, credit outstanding to industry saw a slower growth of 7.8 per cent compared to 8.5 per cent in the year-ago period. The infrastructure sector, which holds a 33.6 per cent share in the outstanding of the total industry, witnessed credit growth of 1.4 per cent, down from 6.6 per cent in the year-ago period. Credit off-take for roads, telecom, and ports declined in March compared to the growth seen last year. However, only the power segment, which has a 51.6 per cent share in infrastructure, experienced a 6 per cent growth, nearly double the 3.8 per cent growth observed in March 2024.

Among major sectors, outstanding credit to textiles, beverages and tobacco, and chemicals and chemical products decelerated, while petroleum, coal products and nuclear fuels, basic metals and metal products, engineering, and construction recorded accelerated year-over-year growth.

Over the past decade, the overall composition of banking exposure has undergone significant changes. The industry segment, which accounted for 44 per cent during the same period, has now decreased to almost half at 23 per cent. Even in the past five years, the share of industry has been declining from 31 per cent in FY20. Credit growth is now led by the personal loan segment, largely retail, which holds the largest share in banking exposure at 34 per cent.

Meanwhile, the large companies have lost their share in industry credit from 81 per cent to 71 per cent in the past decade. Even in FY25, their share slipped to 70.7 per cent from 72 per cent in FY24.

The MSME segment has generally continued to outpace the large segment. MSMEs have grown their share post-pandemic from 18 per cent in FY20 to 29 per cent.

Growth in the services sector came in at 12.4 per cent in March 2025, nearly half of the 23.5 per cent reported a year ago primarily due to lower growth in credit to non-banking financial companies (NBFCs) and commercial real estate and was mitigated only in part by growth accelerating in the computer software and wholesale trade segments.