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Key Points

Indian corporations are preparing for a massive investment cycle that could transform the country's economic landscape. The S&P Global Ratings report indicates a projected capital spending of $800-$850 billion over the next five years. Investments will be primarily concentrated in power, renewables, airlines, and emerging sectors like green hydrogen and semiconductors. These strategic investments are expected to enhance operational efficiency and support India's economic growth without significantly increasing corporate debt.

Key Points: India's Corporate Capex to Hit $850 Billion in Growth Surge

  • Corporate capital spending projected to reach $850 billion by 2028
  • Power and renewables sectors to lead major investment surge
  • Investments will boost business scale without increasing leverage
2 min read

Indian corporates to double capital spending to $800-$850 billion over next 5 years

S&P Global Ratings reveals Indian companies set to double capital spending, driven by strong cash flows and economic opportunities

"Corporate India is chasing growth opportunities - S&P Global Ratings"

New Delhi, June 10

Indian corporates are projected to double their capital spending to $800 billion-$850 billion over the next five years, which will be largely financed by operating cash flows and facilitated by ample domestic funding options, said an S&P Global Ratings report on Tuesday.

New Delhi, June 10 (IANS) Indian corporates are projected to double their capital spending to $800 billion-$850 billion over the next five years, which will be largely financed by operating cash flows and facilitated by ample domestic funding options, said an S&P Global Ratings report on Tuesday. Barring execution mistakes or negative macro changes, these investments should boost business scale without driving up leverage, the report noted.

“Corporate India is chasing growth opportunities. In our view, Indian companies are well positioned for a growth run. Balance sheets are the leanest they've been in years. Companies are investing to meet demand underpinned by favourable government policies and a positive economic outlook,” according to the credit rating agency.

Successful execution of plans would enlarge their operational scale, providing lasting cost benefits and business efficiencies.

Higher investments in power, particularly renewables, will be a major spending area. Power, including transmission, combined with airlines, and emerging areas like green hydrogen, will (by estimates) account for about three-quarters of the increase in capex over the next five years.

“In absolute terms, investments in airports could double, or even triple during this period. Conventional sectors such as steel, cement, oil and gas, telecom and autos will grow at a more steady pace of 30-40 per cent,” said the report.

Healthy starting points and strong operating cash flows will keep credit strains in check. Companies across sectors have deleveraged meaningfully over the past three to four years including utilities (except renewables).

Earnings and operating cash flow across sectors are about 60 per cent higher or double the levels from five years back, and will grow further, the report noted.

In the airlines sector, total investment in new aircrafts will likely exceed $100 billion.

New areas such as green hydrogen, semiconductors and battery plants should see significant debt funding. However, these projects are undertaken predominantly by large companies, including conglomerates, the report noted.

- IANS

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Reader Comments

R
Rahul K.
This is fantastic news for Make in India! 💪 With such massive investments in renewables and infrastructure, we're finally seeing the results of stable economic policies. Hope state governments also improve ease of doing business to support this growth.
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Priya M.
While the numbers look impressive, I hope corporations don't forget their social responsibilities. Such massive investments should create quality jobs and upskilling opportunities for our youth, not just profits for shareholders.
A
Arjun S.
The focus on green hydrogen and renewables is commendable. As someone from Gujarat where many solar parks are coming up, I've seen how such projects can transform local economies. More power to sustainable development! 🌱
S
Sneha P.
$100 billion in new aircrafts? Hope our airlines learn from past mistakes and focus on both expansion AND customer service. The aviation sector has huge potential but needs better management.
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Vikram J.
Good to see steel and cement in steady growth. These are the backbone of infrastructure development. But corporations must ensure they adopt cleaner technologies - can't compromise environment for growth.
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Neha T.
Exciting times ahead! With semiconductor and battery plants coming up, we might finally reduce our dependence on imports. Hope the government provides necessary policy support to make these ventures successful. Jai Hind! 🇮🇳

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