mumbai, Oct. 23 -- Banks are lending to companies at a higher pace after several muted quarters, and a strong credit pipeline has raised hopes of a more robust turnaround in the second half of the fiscal. While much of the new demand is for working capital, companies in infrastructure, renewables and manufacturing are also beginning to consider capital expenditure, bankers said. At HDFC Bank, corporate and other wholesale loan book grew 6.4% annually and 4.7% sequentially in the September quarter, in contrast to the 1.7% annual growth and 1.3% sequential decline in the June quarter. Still, demand for capex loans is "very modest," chief financial officer Srinivasan Vaidyanathan said at the September quarter earnings call on 18 October. "It is largely working capital financing (that) we have participated in (this quarter)." India's largest private sector lender had slowed wholesale lending in the previous quarters, as intense competition hurt margins. It has been fixing its balance sheet ever since the merger with HDFC Ltd. Rival Axis Bank's corporate loan book grew 20% annually and 11% sequentially in the September quarter, against 9% and 6% in the June quarter. The bank has always chosen growth with favourable loan pricing, executive director Subrat Mohanty said. "In Q2, there were a few good opportunities that came our way, something that we have not seen in the past. In general, we find that there is opportunity in the wholesale segment for us based on strong relationships and some of trends that we are seeing in certain sectors such as movement from clients making new investments," he said. While HDFC Bank, Axis Bank, IndusInd Bank and Bank of India (BoI) reported higher annual growth in their corporate loan books, ICICI Bank, Federal Bank, Yes Bank, Punjab National Bank (PNB) and Indian Bank reported weaker growth than last year. The corporate credit pickup at some of the leading banks comes at a time of rising bond yields. The yield on the benchmark 10-year government bond rose 20 basis points (bps) to 6.5% in the September quarter. The weighted average lending rate on fresh rupee loans of scheduled commercial banks was at 8.75% in August, down from 8.81% a month earlier, latest RBI data showed, making it cheaper for corporates to borrow. "It's still a bit early," said A.M. Karthik, senior vice-president and co-group head of Icra. "In Q2, you would have seen corporate credit growth because the yields were still high. And to that extent, bank credit actually picked up in Q2," said Karthik, adding the ratings agency had not revised its credit growth estimates for FY26 yet. The cuts in goods and services tax rates aimed at spurring domestic demand and to partly offset the impact of US tariffs on exports would support credit expansion for banks and NBFCs in the near term, Icra said in a 19 September statement. Public sector banks have joined the lending rebound. PNB, for instance, has total loan sanctions of Rs.1.78 lakh crore, including corporate loans, awaiting phased disbursements. "We are expecting good corporate loan book growth in Q3 and Q4 because of these sanctions," chief executive Ashok Chandra said. Proposals are coming from infrastructure, road projects, renewable energy, and other sections of industrial borrowers, Chandra told investors on the Q2 earnings call. Its corporate loan book recorded a nearly 8% annual growth in the September quarter, against 7% in the previous quarter. BoI reported nearly 12% annual growth in its corporate book in Q2, double the 5.5% on year rise in Q1. Like PNB, BoI also has a robust disbursement pipeline....