There has been a clear reversal in fresh capital speculation by corporates, with bank loan demand being controlled by infrastructure, roads, renewable energy, and oil sectors.

Considering the last few quarters, loan demand was run by the higher utilisation of working capital ahead of an upsurge in the commodity prices; from the September quarter forwards, corporate loan growth has swerved towards fresh capacity building, as per the media report.

“We have seen respectable growth in the roads segment and renewable energy. This growth comes from comparatively larger corporates as they have deleveraged significantly over the last few years.” “We believe the increase in working capital utilisation is still to play out,” Chadha said. “For us, it is still in the series of 55-60%. There is still upside for corporate loans to raise from here on.”

According to statistics from the RBI, credit to the industry surged by 12.6% in September 2022 compared with 1.7% progress a year earlier. Particularly, credit to large industry enhanced to 7.9% against a shrinkage of 2.1% in September 2021. Bankers imagine corporate loans to pick further impetus in the outstanding two quarters of this fiscal year.

“There is a development in capacity utilisation, and the demand types witnessed on the ground give us the sureness,” said Dinesh Khara. “We are near-sighted Capex-related demand, and capacity utilisation is screening signs of improving.”

The largest Indian lender has a term loan conduit of Rs 2.4 lakh crore and sees demand from sectors like infrastructure, services, power, renewable energy, and oil marketing corporations.

According to the RBI survey, seasonally attuned capacity utilisation of the manufacturing sector amended from 73% in the March 2022 quarter to 74.3% in the June quarter, its uppermost level in three years.