The report also states that the number of active loans (volume) in the sector stood at 199.49 thousand in March 2021.
The industry has observed a quarterly decline in NPAs since December 2018. The year-on-year NPA improved by 5.83% in March 2021 and stood at 13.6%; while QoQ reduces by 0.35%.
Sector export earnings
India is a major exporter of switchgear, control gear, transformers and parts, industrial electronics, cables, transmission line towers, conductors, rotating machinery (motors, generators alternating current and generator sets) and parts. According to the report, export credit in March 2021 stood at Rs 2.2 thousand crores with a decline of nearly 8% QoQ and 6% YoY.
Majority of overall credit by volume dominated by MSME borrowers
The MSME borrower segment constitutes 95% of the total number of loans (volume of credit) to the sector and 30% of the total amount of loans (value of credit) in March 2021. Borrowers in the micro segment constitute 83% of the disbursements (in volume) in Fiscal Year 2020-21. The industry has a presence of 3 lakh borrowers as of March 2021.
Geographical information on the main regions
At the state level, Maharashtra and Delhi are the top two states in terms of credit portfolio (value), each having portfolio > Rs 10,000 crore as of March 2021. The report highlights the share of the top 12 regions of electrical machinery manufacturing in India to 84% of the credit portfolio and 32% of all active credit units in the country.
In a statement, Sivasubramanian Rammann, Chairman and Managing Director of SIDBI, said: “India is the world’s third largest producer and second largest consumer of electricity, while India’s electrical machinery industry is one of the pillars of the economy. The sector contributes 8% of the country’s manufacturing output, 1.5% to the country’s GDP, 1.5% to the country’s exports. The government is aiming for 30% penetration of electric vehicles by 2030 with incentives to make domestic manufacturing economically viable. This represents an opportunity for domestic manufacturers in the electrical machinery sector and has a promising future with exponential growth.
Industry Lender Profiles
Public sector banks dominated sector financing with a share of 60.3% by volume in March 2021. The share of private banks, NBFCs and foreign banks was 22.3%, 11.4% and 2 .4%, respectively.
By value, private banks hold the largest share with 37.8%, followed by public sector banks with 23.1%, NBFCs with 19.8% and foreign banks with 16.1% as of March 2021.
“The Indian electrical machinery industry has a diverse and strong manufacturing base backed by a strong supply chain. The industry is a huge contributor to the economy through its contribution to GDP, exports and job creation. As markets have returned to normality and manufacturing activities have accelerated, the sector has shown promising signs of recovery and is set to continue its growth trajectory,” said Navin Chandani, Managing Director and CEO of CRIF India, in a statement. communicated.