Mumbai, October 15, 2026: Brickwork Ratings (BWR) has projected that infrastructure and power sectors will attract increased funding in the second half of FY27, supported by project execution and timely payments. The agency also expects commercial real estate to drive funding flows in services, while gold loans and loans against property will support non-banking financial company (NBFC) lending. However, small NBFCs with significant microfinance exposure are likely to remain under stress.
According to BWR, India Inc’s credit profile demonstrated resilience in the first half of FY27 despite challenges such as elevated crude oil prices, deficient monsoon rainfall, and tighter global monetary conditions. Data from major Indian rating agencies indicated 2.7 upgrades for every downgrade between April and September 2026, compared to 2.4 upgrades per downgrade a year earlier. Downgrades declined by 11%, while upgrades remained steady during the period.
Public spending and domestic demand support upgrades
K. H. Patnaik, Chief Ratings Officer at BWR, said that upgrades were led by infrastructure, power, capital goods, auto components, and secondary steel, driven by public spending and steady domestic demand. In contrast, sectors such as textiles, ceramics, diamonds, and specialty chemicals faced pressure due to weak exports and competition from cheaper imports.
BWR-rated companies recorded 3.3 upgrades for every downgrade, with upgrades accounting for 35% of rating reviews. Corporate debt relative to equity declined to approximately 0.7 times in FY25 from 1.1 times in FY20, providing companies with greater borrowing headroom. “The lesson for companies is simple: a strong credit rating is now a funding asset,” Patnaik said, emphasising the importance of creditworthiness as financing conditions tighten.
Commercial real estate and NBFC lending trends
Non-food bank credit grew 18.8% year-on-year in August 2026, compared with 10.2% a year earlier, while corporate bond fundraising declined 34% during April-June. Services credit grew 24.3% in the same period, with commercial real estate among the key drivers. Hyderabad was highlighted as a beneficiary, recording its strongest-ever first half for office leasing.
Meanwhile, exporters are facing renewed US tariff risks, and rural and discretionary demand could weaken, particularly in southern India, where rainfall was 24% below normal. Patnaik cautioned, “H1FY27 showed India Inc has the strength. H2FY27 will test how well it uses it,” underscoring the importance of strong balance sheets as financing costs rise.
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