India Inc raises a record $61 billion via ECBs in FY25, NBFCs lead way

Synopsis

Data published by the Reserve Bank of India (RBI) Wednesday showed that external commercial borrowing (ECB) registrations by companies, including non-banking finance companies, stood at more than $11 billion in March. This took the total number to $61 billion for FY25, compared with $49 billion a year ago.

Mumbai: Fund raising by Indian companies through overseas loans jumped to the highest on record in FY25, led by non-bank lenders that borrowed beyond home amid a slowdown in lending by local banks.

Data published by the Reserve Bank of India (RBI) Wednesday showed that external commercial borrowing (ECB) registrations by companies, including non-banking finance companies, stood at more than $11 billion in March. This took the total number to $61 billion for FY25, compared with $49 billion a year ago.

Borrowing numbers for FY25 is the highest since FY2005, the financial year until which the RBI data is available.

NBFCs borrowed $21.6 billion out of the total ECB borrowings of $50.1 billion till February of FY25. The break-up for March was not available.

"ECBs registration rose in the last financial year because of NBFCs. We have seen 200-300 basis points increase in the ECB as part of the overall borrowings of top-rated NBFCs. The cost of borrowing for them was cheaper compared with bank loans. Additionally, bank lending to NBFCs had also come down because of the risk weights," said Jinay Gala, director at India Ratings. "While RBI has rolled back the risk weights, we don't expect bank lending to NBFCs to increase meaningfully. Marginal costs of fund-based lending rate are yet to see transmission of RBI's rate cut. So, better-rated NBFCs are expected to continue to rely on ECBs," he added.

Agencies

By March 2025, banks' outstanding credit exposure to NBFCs stood at ₹16.4 lakh crore, up 5.7% YoY. The share of NBFC credit in total bank credit decreased from 9.4% in March 2024 to 9.0% in March 2025, according to CARE Ratings.

Nearly 44% of total ECBs registered during April 2024-February 2025 were for capital expenditure, including on-lending/sub-lending, according to RBI's April bulletin. The overall cost of registered ECBs declined 35 bps during the year, driven by a reduction in both the global benchmark interest rates - the secured overnight financing rate (SOFR) and the weighted average interest margin.

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