Is India’s Private Corporate Sector Optimistic About Capex Despite Global Uncertainties?

Synopsis
Key Takeaways
- 30% of private firms plan capex investments for FY 2024-25.
- 40.3% focus on core assets for capital expenditure.
- Average gross fixed assets rose 27.5% from 2022-23.
- Projected capex per enterprise for 2024-25 is Rs 172.2 crore.
- Cumulative capex growth of 66.3% over four years.
New Delhi, April 29 (NationPress) In spite of hurdles such as weak demand, geopolitical tensions, and high borrowing costs, approximately 30 percent of companies in the private corporate sector have expressed intentions to invest in upgrades during FY 2024–25. This aligns with the substantial rise in capital expenditure (capex) observed last fiscal year, according to a government survey released on Tuesday.
The slightly reduced capex expectations for FY2025–26, while still exceeding the 2023–24 benchmarks, reflect a cautious approach following a robust performance in 2024-25. Overall, this trend suggests a growing corporate optimism and a prudent investment strategy amid enhanced economic stability, as indicated by data from the Ministry of Statistics.
The survey estimates reveal that nearly 40.3 percent of businesses intend to focus their capex on core assets in 2024-25. Furthermore, 28.4 percent plan to invest in enhancing existing assets, while around 11.5 percent are targeting opportunistic assets, and 2.7 percent are considering debt strategies.
Only a fraction, less than 0.5 percent, of companies have opted for strategies involving distressed assets and non-performing loans. Meanwhile, about 16.9 percent have allocated their capex towards various other investment strategies.
The findings show a significant rise in the average gross fixed assets per enterprise in the private corporate sector, increasing from Rs 3,151.9 crore in 2021–22 to Rs 3,279.4 crore in 2022–23 (a growth of 4 percent), and further to Rs 4,183.3 crore in 2023–24, marking a notable 27.5 percent growth.
The estimated capex per enterprise for the years 2021–22, 2022–23, and 2023–24 stood at Rs 109.2 crore, Rs 148.8 crore, and Rs 107.6 crore, respectively.
Moreover, the projected provisional capital expenditure per enterprise for acquiring new assets in 2024–25 is Rs 172.2 crore.
There has been a cumulative increase of 66.3 percent in aggregate capex (unweighted) over the four-year span from 2021-22 to 2024-25.
The strategy of 40.3 percent of enterprises aims to focus capex on core assets during 2024–25, followed by 28.4 percent aiming for value addition to existing assets, as per the survey results.
In 2022–23, the Parliamentary Standing Committee advised the Ministry of Statistics to formulate a comprehensive methodology for capturing capex data within the private sector.
The primary goal of the capex survey is to assess the capex trends of private corporate sector enterprises over the previous three financial years (2021-22, 2022-23, and 2023-24), alongside predicted capital expenditure for the current year (2024-25) and future financial years (2025-26).
A total of 2,172 enterprises provided complete information across all five years of the reference period, establishing a fixed panel. The results indicate a remarkable 66.3 percent growth in aggregate capex (unweighted) from 2021-22 to 2024-25, according to the survey.