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

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

Synopsis

In a revealing government survey, it was found that despite facing challenges like weak demand and geopolitical tensions, India's private corporate sector remains optimistic, with 30% planning significant investments for FY 2024-25. This reflects a growing confidence in the economy and highlights strategic shifts in capital expenditure.

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.

Point of View

This survey sheds light on the resilience and adaptability of India's corporate sector amidst global challenges. The findings indicate a cautious yet confident approach to investment, aligning with broader economic recovery trends. It’s clear that businesses are strategizing for sustainable growth, which is encouraging for the overall economic landscape.
NationPress
27/07/2025

Frequently Asked Questions

What is the main finding of the government survey regarding corporate capex?
The survey revealed that about 30% of firms in the private corporate sector plan to invest in upgrades in FY 2024–25 despite facing challenges like weak demand and geopolitical tensions.
How has the average gross fixed assets changed?
The average gross fixed assets per enterprise increased from Rs 3,151.9 crore in 2021–22 to Rs 4,183.3 crore in 2023–24, indicating a significant growth.
What percentage of enterprises are focusing on core assets for capex?
Approximately 40.3% of enterprises plan to focus their capex on core assets during 2024-25.
What is the projected capex per enterprise for 2024-25?
The estimated provisional capital expenditure per enterprise for acquiring new assets in 2024-25 is Rs 172.2 crore.
What does the capex survey aim to achieve?
The primary goal of the capex survey is to estimate the trends of capital expenditure among private corporate sector enterprises over the past three financial years and predict future expenditures.