Balance sheet of India Inc weakens; net debt-equity ratio inches up in FY19

The private sector debt-equity ratio inched up marginally to 0.88x at the end of FY19, against 0.86x a year ago

The recent deterioration in corporate earnings has begun to affect India Inc’s balance sheet and leverage ratios. India’s top companies and business groups reported an increase in their debt-equity ratio during 2018-19 (FY19), putting a stop to the process of balance sheet deleveraging seen in the previous three years. The private sector debt-equity ratio (net of cash and bank balances on companies’ books) inched up marginally to 0.88x at the end of FY19, against 0.86x a year ago. 

Companies’ combined borrowings were up 13.2 per cent year-on-year (YoY) in FY19, growing at the fastest pace in at least the last