My thoughts on two interesting trends in Corporate leverage in India.
Graph a: Steadily increasing trend of Debentures and Bonds as a source of debt . However this will be skewed towards large corporates. As this market matures, the effect should percolate to SMEs, thereby improving access to growth capital.
Graph b: Overall deleveraging in the industry. May indicate increasing strength, especially amongst the larger players (subdues the average) as also the overall constraint in bank credit for smaller players. Another interpretation is lower credit growth due to subdued economic activity.
Data Source: CMIE/RBI