India Inc''s capital expenditure (capex) in the current financial year (2008-09) likely to come down almost by 30 per cent. This is to some extent the result of a fall in corporate fund-raising over the last six months and partly owing to difficulties in raising funds overseas, following the sub-prime credit crisis in the US.
According a Reserve Bank of India, India Inc''s capex will touch Rs 173,173 crore in 2008-09, significantly lower than the Rs 245,107 crore raised by companies in 2007-08.
In the last financial year, one of the key drivers of growth in capex was the Rs 442,000 crore worth of capital inflows - of which 37.1 per cent was in foreign debt, 26.9 per cent was equity market-related inflows, 14.4 per cent was net foreign direct investment and the balance 21.6 per cent in other hybrid inflows. (The reason capital inflows exceed capex is that this money may typically take a year to be allocated for investment).
But this fiscal, analysts believe capital inflows into India could drop to anywhere between Rs 132,000 crore and Rs 176,000 crore. The RBI pegs the figure at Rs 148,350 crore.Last financial year (2007-08) alone, around 648 listed firms had invested a whopping Rs 140,463 crore in fixed assets. This investment accounted for about 3 per cent of India''s gross domestic product (GDP) and 13.3 per cent of net sales of the sample companies.
The investment was top- heavy. Around 25 firms accounted for 61 per cent of the total investment. Reliance Industries topped the category with a capex spend of Rs 19,111 crore - up 131 per cent from the year before. The remaining 24 firms posted a 46 per cent rise in investment
According a Reserve Bank of India, India Inc''s capex will touch Rs 173,173 crore in 2008-09, significantly lower than the Rs 245,107 crore raised by companies in 2007-08.
In the last financial year, one of the key drivers of growth in capex was the Rs 442,000 crore worth of capital inflows - of which 37.1 per cent was in foreign debt, 26.9 per cent was equity market-related inflows, 14.4 per cent was net foreign direct investment and the balance 21.6 per cent in other hybrid inflows. (The reason capital inflows exceed capex is that this money may typically take a year to be allocated for investment).
But this fiscal, analysts believe capital inflows into India could drop to anywhere between Rs 132,000 crore and Rs 176,000 crore. The RBI pegs the figure at Rs 148,350 crore.Last financial year (2007-08) alone, around 648 listed firms had invested a whopping Rs 140,463 crore in fixed assets. This investment accounted for about 3 per cent of India''s gross domestic product (GDP) and 13.3 per cent of net sales of the sample companies.
The investment was top- heavy. Around 25 firms accounted for 61 per cent of the total investment. Reliance Industries topped the category with a capex spend of Rs 19,111 crore - up 131 per cent from the year before. The remaining 24 firms posted a 46 per cent rise in investment
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