Over the past couple of years, debt has become a taboo word in India. Rising defaults and non-performing assets (NPAs) of public sector banks have created a perception that debt means trouble. In the corporate world, however, debt is a necessary tool for growth. For example, the ideal way to finance an infrastructure project would be to fund it 70% through debt and 30% through equity.

A closer look at data from Fortune India 500’s Loan Warriors list shows India Inc has not given up on debt. The offensive launched by Reliance Industries Ltd (RIL) in the telecom industry is reflected on its balance sheet. The debt of the firm increased at a compound annual growth rate (CAGR) of 11.57% to ₹2,39,843 crore in 2017-18—nearly double the figure in 2013-14. However, RIL, which is led by India’s richest man Mukesh Ambani, has managed to raise that debt from sources that haven’t hampered its growth. Its average cost of borrowing in FY18 was only 3.36%, much less than many of its competitors.

It is a similar story for Bharti Airtel, which has had to fend off RIL’s Jio onslaught. The Sunil Bharti Mittal-led company, which until recently held the crown of the largest telecom operator in India by subscribers, has seen its debt increase at a CAGR of 7.96% for the past five years. Its debt in FY18 was at ₹1,11,334 crore. However, its average cost of borrowing at 8.38% was much higher than that of RIL.

While telecom businesses piled on the debt as they went into a bitter battle, oil and gas companies took the opportunity of lower crude oil prices to reduce their burden. Indian Oil Corporation, No. 1 on the Fortune India 500 list this year, reduced its debt at a CAGR of 7.11% over the past five years to ₹65,650 crore, from close to ₹1 lakh crore in 2013-14. During the same period, Hindustan Petroleum Corporation also cut its debt by more than half to ₹21,952 crore.

However, the biggest reduction in debt came from companies seeking to avoid the noose of the Insolvency and Bankruptcy Code proceedings. GMR Infrastructure nearly halved its debt to ₹23,067 crore in FY18 from ₹45,041 crore in FY14 and GVK Power and Infrastructure reduced its debt by nearly ₹8,000 crore during the same period. Jaiprakash Power Ventures reduced its debt by nearly ₹4,000 crore during the period.

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