• The overall infrastructure credit growth (banks and NBFC-IFCs) moderated to 7% in FY2025 from 10% in FY2024, further declining to 4% (annualised) in Q1 FY2026. NBFC-IFCs recorded steady growth of 11% in FY2025 (in line with estimates) while the banking sector’s growth was muted at 1%. Further, the NBFC-IFC book rose by 8% (annualised) in Q1 FY2026 compared to the banking sector’s degrowth of 2% (annualised). ICRA expects NBFC-IFCs to expand by 10-12% in FY2026, supported by the GoI’s thrust on the infrastructure sector to achieve objectives under the Viksit Bharat Vision 2047.
• Healthy activity in the infrastructure sector, especially power and urban infrastructure, has coincided with the recovery in the balance sheet strength of NBFC-IFCs and the availability of relatively long-term funding at competitive rates for these entities. The healthy infrastructure capital expenditure (capex) of Rs. 11.2 lakh crore in the Budget for 2026 augers well for growth.

Exhibit: Trend in infrastructure finance credit across banks and NBFC-IFCs

Source: Financial results of NBFCs, ICRA Research; Annualised for Q1 FY2026