India's corporate sector witnessed a powerful rebound in fundraising activity during the July-September quarter of 2025, breaking a two-year trend of weakness in the second quarter. After a decline in the preceding three months, non-financial enterprises significantly ramped up their capital mobilization efforts.
A Stellar Reversal in Funding Momentum
Data from the Centre for Monitoring Indian Economy (CMIE) reveals that total funds raised by companies surged by 58.1% year-on-year in the September 2025 quarter. This marks the fastest growth pace since June 2023. On a sequential basis, the jump was equally impressive at 35%, a stark contrast to the nearly 34% contraction recorded in the April-June period.
The total quantum of funds mobilized reached an estimated ₹7.5 trillion, up substantially from ₹5.6 trillion in the previous quarter. This robust performance shattered the recent pattern where the July-September period had consistently lacked momentum over the past two years.
Profit Boom and Bank Credit Fuel the Recovery
The revival was powered by two primary sources: soaring internal profits and a strong comeback in bank lending.
Net profits emerged as the dominant source, contributing nearly 40% of all funds raised. Non-financial companies recorded a massive ₹3 trillion in net profits, which grew at a four-year high rate of 54.5% compared to the same period last year. "The rise in internal accruals reflects a phase of strong profitability, enabling companies to rely more on their own cash flows to fund operations and expansion," noted Divam Sharma, co-founder and fund manager at Green Portfolio PMS. This trend indicates a strategic preference for lighter debt burdens and stronger balance sheets.
After a rare dip in the June quarter, bank credit staged a strong comeback. Net borrowing from scheduled commercial banks surged to ₹2.4 trillion in the September quarter, accounting for about 31% of total funds. "Bank credit has picked up as businesses are entering this cycle with cleaner, less leveraged balance sheets, which has opened room for fresh funding," Sharma explained.
Mixed Trends in Equity, Debt, and Foreign Flows
While profits and bank loans led the charge, other funding avenues showed varied performance:
- Fresh Equity Issuances: Remained subdued, raising only ₹0.4 trillion—a 42% decline from a year ago, weighed down by slower private placements.
- Debt Securities: Issuance remained strong at ₹0.7 trillion, posting a healthy 42.6% year-on-year increase, though slightly lower than the preceding quarter.
- Foreign Direct Investment (FDI): Continued to be a significant source, contributing 11% of total funds with net inflows of ₹0.9 trillion.
- External Commercial Borrowings (ECBs) & Commercial Paper (CPs): Both instruments saw muted activity, together accounting for less than 10% of total funding. ECB inflows were estimated at ₹0.3 trillion, as domestic lending rates eased despite a weaker rupee.
Experts point to firm domestic macro indicators and healthy visibility around consumption as key factors lifting the confidence of both issuers and investors. The recovery was fairly broad-based across sectors. All eyes are now on whether this renewed momentum can be sustained in the upcoming quarters.
