India Inc chooses deleveraging over growth; net debt-equity ratio improves

The net result was an improvement in balance sheet leverage, which is positive for bankers and the stock market valuation for many of the debt-laden companies

For the third year in a row last fiscal year, corporate India stayed focused on deleveraging its balance sheet and not pushing for growth, in spite of the recent pick-up in revenue growth. Corporate India’s net debt-equity ratio improved for the third consecutive year in FY18 while investments in new projects hit a 10-year low.

Combined fixed assets or investments in plant and equipment, including projects under implementation of companies (excluding those from the oil and gas sector), was up three per cent in FY18, growing at the slowest pace in at least 10 years. The result was a virtual freeze