Core Insights - The total flow of financial resources to the corporate sector increased to ₹35 lakh crore in FY25, reflecting a 3% rise from the previous year, but indicating a shift away from traditional bank credit, which suggests a broader economic slowdown [1][10] Funding Composition - Nearly 49% of the total resources raised, amounting to ₹17.1 lakh crore, came from non-bank channels, including corporate bonds, NBFC loans, equity issuances, and foreign direct investment [2][10] - Demand for bank credit declined by 14% to ₹17.9 lakh crore, highlighting a significant shift in funding sources [10] Equity Market Performance - Non-financial corporates raised ₹3.8 lakh crore through equity in FY25, marking a substantial increase of 188% compared to the previous year, driven by strong equity market performance [2][10] Lending Trends - The slowdown in bank credit may be attributed to cautious lending practices towards NBFCs and unsecured retail segments, as well as a high base effect from FY24 when bank credit surged by 20% [6][10] - NBFCs and financial institutions increased their lending to corporates, disbursing ₹6.1 lakh crore, which is a 20% rise [6][10] - Borrowings through corporate bonds and commercial papers by non-bank entities rose by 15% to ₹2.1 lakh crore [6][10] Internal Funding Sources - The increased use of internal accruals for business expansion has contributed to the decline in bank credit, as profitability among large corporates has improved [8][10] Policy Response - To stimulate credit demand, the Reserve Bank of India (RBI) has reduced policy rates by 100 basis points since February, following a two-year pause, and ensured ample liquidity in the banking system [9][10]