The interest coverage of India Inc has improved to 5.76 in FY22 from 4.04 in FY20, due to the favourable rate cycle in the past two years, indicating a certain level of comfort among companies when it comes to debt servicing.
The weighted average lending rate had fallen 90 basis points cumulatively, during the easing cycle.
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While large companies benefited, small industries continue to remain vulnerable on interest coverage despite various measures taken by the government and the Reserve Bank of India, such as the Emergency Credit Line Guarantee Scheme.