FDI Company Profits Rise Despite Slower Sales Growth Due to Lower Interest Costs: RBI

The Reserve Bank released data on the financial performance of 3,100 non-government non-financial FDI companies in India for 2024–25, based on audited accounts prepared under Ind-AS. These companies accounted for ₹25,96,425 crore in paid-up capital, representing 51.9% of total FDI company capital in the annual census. Investments were primarily from Singapore, USA, and Mauritius, with major presence in manufacturing and services, particularly information and communication. Net sales growth moderated to 8.7%, with services improving slightly and manufacturing slowing. Operating expenses rose to 9.1%, driven by manufacturing costs and employee remuneration. Operating profit growth declined to 10.7%, though profit after tax increased by 22.2% due to higher non-operating income and lower interest expenses. Leverage stood at 25.0%, while interest coverage improved to 5.8. External funding share declined, and capital formation increased, indicating improved investment activity and financial stability.

Reserve Bank of India

April 22, 2026

Finances of Foreign Direct Investment Companies, 2024-25

Today, the Reserve Bank released the data¹ relating to financial performance of non-government non-financial (NGNF) foreign direct investment (FDI) companies in India during 2024-25 (https://data.rbi.org.in/#/dbie/reports/Statistics/Corporate%20Sector/Finances%20of% 20FDI%20Companies) based on audited annual accounts of 3,100 companies, which reported in the Indian Accounting Standards (Ind-AS) format for three accounting years from 2022-23 to 2024-25. Their economic sector classification is based on their principal business activity, as reported in MGT-7 form of the Ministry of Corporate Affairs, Government of India, which is the primary source of these data.

The paid-up capital (PUC) of these companies amounted to 25,96,425 crore, which accounted for 51.9 per cent of the total PUC of FDI companies that had reported in the 2024-25 round of the Reserve Bank’s annual census of foreign liabilities and assets of Indian direct investment companies.

Highlights

• Companies with direct investment from Singapore, USA and Mauritius accounted for more than half of the sample companies; Japan, Netherland and the United Kingdom were other major direct investment sources in India. Majority of the sample companies belonged to manufacturing and services sectors, within services sector more than one third of companies belong to information and communication industries (Statement 1).

Sales

• The net sales growth of the select FDI companies moderated to 8.7 per cent in 2024­25 from 9.4 per cent in the previous year (Statement 2).
• Industry wise, net sales growth of services sector marginally increased to 12.7 per cent from 12.2 per cent in the previous year, while for manufacturing sector it decelerated to 5.1 per cent from 6.8 per cent in the previous year (Statement 8).

Expenditure

• The operating expenses increased to 9.1 per cent during 2024-25 from 7.7 per cent in the previous year mainly due to increase in manufacturing expenses and renumeration to employees (Statement 2).
• Remuneration to employees increased for services sector while it moderated for manufacturing sector during 2024-25 (Statement 8).

Profits

• With moderation in growth of sales and increase in expenses, the operating profit growth reduced to 10.7 per cent during 2024-25 from 22.1 per cent in the previous year (Statement 2).
• Private limited FDI companies showed higher profit growth as compared to public limited FDI companies (Statement 10).
• Profit after tax increased by 22.2 per cent during 2024-25; supported by higher non-operating income and lower interest expenses; industry-wise, services sector companies recorded higher post tax profit growth (29.2 per cent) as compared to manufacturing sector (12.6 per cent) (Statements 2 and 8).

Leverage

• Leverage (measured in terms of debt-to-equity ratio) of the sample FDI companies stood at 25.0 per cent during 2024-25; among the major sectors, leverage of manufacturing sector moderated to 16.3 per cent, while it increased to 23.6 per cent for services sector during 2024-25 (Statements 3 and 11).
• Interest coverage ratio² (ICR), a measure of debt servicing capacity improved to 5.8 during 2024-25; ICR of manufacturing and services companies was at 6.9 and 6.6 respectively in 2024-25 (Statements 3 and 11).

Sources and Uses of Fund

• The share of external sources of funds reduced to 42.6 per cent in 2024-25 from 45.5 per cent in the previous year due to decline in term loans from banks (Statement 6A).
• The ratio of gross capital formation to total uses of funds increased to 45.3 per cent during 2024-25 from 41.9 per cent in the previous year (Statement 3).

Explanatory notes to the statements are given in the Annex.

Press Release: 2026-2027/123

(Brij Raj)
Chief General Manager

Notes:

¹ The Previous data release in the series was published on March 11, 2025, based on finances of 2,418 FDI companies for the years 2021-22 to 2023-24.

² ICR (ratio of earnings before interest and tax to interest expenses) is a measure of debt servicing capacity of a company. The minimum value for a variable ICR is 1.