Mumbai, Aug. 21 -- Traditional banks are moving deeper into startup lending as more new-age businesses turn profitable and generate steadier cash flows, opening up cheaper credit for growth-stage firms. The shift is squeezing pricing for newer lenders that were so far keeping their growth engines funded, industry executives said.

HSBC India, for one, has already deployed over half of the $1 billion debt capital support announced for startups in 2025. "We have specialist teams across the business and risk functions to understand the nuances of startups and, accordingly, calibrate our credit appetite on an ongoing basis," said Dilip Gopinath, who heads innovation banking at the lender.

The bank doesn't have an aggressive approach, but a "...