New Delhi: Brushing aside concerns of slowdown in industrial growth, capital expenditure announcements by India Inc. soared 66% during Jan-Mar 2008 reaching a $174 billion as compared to $105 billion lined up in Oct-Dec 2007, according to a study on “Investment announcement during Q4 (Jan-Mar 2008)” carried out by industry chamber, Assocham.
While there seemed to be no sign of postponement or shelving of investment plans in the Q4 of 2007, high domestic interest rates coupled with drying up of global liquidity may dampen investment outlook in coming months.
• Infrastructure sector gets boost with capital outlay of more than $109 billion announced during Q4 of fiscal 2008
• While steel continued to lead the list of sectors attracting highest planned investment for the Q2 in a row following Q3, its magnitude fell by 28%
• Steel with investment announcements worth $22.30 billion accounted for nearly 13% of the total capex planned in Q4 of 2007-08, as against almost $31 billion in Q3 of the same year; the sector attracted almost a third of the investments proclaimed across the sectors in Oct-Dec 2007
• Companies in the oil and gas space will spend roughly $22.20 billion on expansion; investments in the sector saw a leap of almost 40% in Q4 of FY2008 over Q3 of same financial year
• Real estate and retail emerged as lucrative investment avenues with over $18 billion in last quarter of 2007-08 which included development of housing projects and hotels among others; the sector experienced maximum absolute jump of about $12 billion in Q4 as compared to Q3 of FY2008
• Retail sector will see investment of $10 billion during Jan-Mar 2008; bulk of outlay was earmarked for expansion (malls, standalone outlets); investment announcements formed 11% of total capex plans of real estate sector and 6% of total investment expenditure by India Inc.
• Power has been attracting investments from private sector with a total capital outlay of $20 billion declared during quarter ending March 2008, after an allocation of close to $16 billion made in Q3
• Telecom plans on investing $18.30 billion to strengthen network and other expansion activities
• Investments planned by capital goods and engineering industries remained almost unaltered in the last quarter of 2007-08 on sequential basis (Q4 over Q3). It was about $1.2 billion and $1.1 billion in Q4 and Q3 respectively
• Attention being received by education sector has not been limited to the government via increased budgetary allocation; private sector is also recognizing it as a high priority area with mixed motives of skill development and profiteering from emerging business opportunities
• Corporate India together with existing educational institutes committed $667 million towards higher education. Though the amount represents a more than five fold increase over the previous quarter, the country needs to deploy much more resources to ensure reaping of demographic dividend
• Fresh investments planned in cement were only about $1.5 billion in Q4 of FY2008. Previous three months of the same financial year recorded planned capital infusion of $4.8 billion
• Investment of $6 billion in ports & shipping, $5 billion in metals (other than steel), $4.5 billion in hospitality, $4.5 billion in auto and $3 billion in IT & ITES planned