Electrical Machinery Industry availed credit of Rs 94.8 thousand crore in March 2021: Report

Hyderabad: Small Industries Development Bank of India (SIDBI) and CRIF High Mark in its fourth edition of 'Industry Spotlight' report that analyses the 'Electrical Machinery' industry found that the total amount of credit availed by the sector as of March 2021 stood at Rs 94.8 thousand crore which witnessed a Y-o-Y increase of 3.2 per cent.

The report also states that the number of active loans (volume), in the sector stood at 199.49 thousand, as of March 2021. The industry observed a quarterly decline in NPAs since Dec 2018. The Y-o-Y NPA improved by 5.83 per cent in March 2021 and stood at 13.6 per cent; while Q-o-Q reduced by 0.35 per cent.

Export earnings of the sector

India is a major exporter of switchgear and control gear, transformers and parts, industrial electronics, cables, transmission line towers, conductors, rotating machines (motors, AC generators, and generating sets) and parts. As per the report, the export credit as of March 2021 stood at `2.2 thousand crores with a nearly 8 per cent Q-o-Q decline, and 6 per cent Y-o-Y decline.

Majority of the overall credit by volume is dominated by MSME borrowers

MSME borrower segment constitutes 95 per cent of the overall number of loans (credit volume) to the sector and 30 per cent of the overall amount of loans (credit value) as of Mar 2021. Micro segment borrowers constitute 83 per cent in disbursements (by volume) in FY 2020-21. The industry has a presence of 3 lakh borrowers as of March 2021.

Geographical insights on top regions in terms of credit portfolio

At the state level, Maharashtra and Delhi are the top two states in terms of credit portfolio (value), each having more than Rs 10000 crore portfolio as of March 2021.

The report highlights the share of top 12 Electrical Machinery manufacturing regions in India at 84 per cent of the credit portfolio and 32 per cent of the overall credit active units in the country.

Lender profiles for the Electrical Machinery sector

Public sector banks are dominant in providing finance to the sector with a share of 60.3 per cent in volume as of March 2021. The share of private banks, NBFCs and foreign banks were 22.3 per cent, 11.4 per cent and 2.4 per cent, respectively. By value, private banks have the largest share at 37.8 per cent followed by public sector banks with 23.1 per cent, NBFCs comprising of 19.8 per cent and foreign banks with 16.1 per cent as of March 2021.

Navin Chandani, MD & CEO, CRIF India, said, "The Indian Electrical Machinery Industry has a diversified, mature and strong manufacturing base supported by a robust supply chain. The industry contributes immensely to the economy through its contribution to GDP, exports, and employment generation. As markets resumed normalcy and manufacturing activities gained pace, the sector has shown promising signs of recovery and is expected to continue its growth trajectory."