"More Indian companies are improving their high financial leverage and boosting their credit profiles by adopting measures such as sale of equity and assets or using their free operating cash flows to reduce debt," S&P Ratings Services said in a statement.
Weak economy and high interest rates in India, which have adversely affected cash flows and debt-servicing ability, have prompted the companies to improve their financial profiles.
"Another reason is companies are refocusing on reducing debt after years of investing significantly on rapid growth," S&P Credit Analyst Mehul Sukkawala said.
S&P also noted that companies in the infrastructure sector with very high leverage are also considering selling assets or stakes in subsidiaries to improve their debt- repayment ability and liquidity.