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Private companies announce new projects worth Rs 2.25 lakh crore, highest quarterly commitment since 2011

Economic Times:  October, 2015

Mumbal: Private companies announced new projects worth about Rs 2,25,000 crore in the July-September period, 54% more from a year earlier and the highest in any quarter since 2011, in what could boost economic activity in the coming months.

While companies continue to be jittery of big-ticket investments, conglomerates like Adani and Vedanta, and many smaller companies have announced new projects in the past quarter in an indication of improving sentiment.

According to data compiled by ET Intelligence, Indian companies - state-owned and private together - announced new projects totalling Rs 3,80,000 crore in the July-September quarter, which was 11.11% higher than a year earlier. Government investments declined to Rs 1,55,000 crore from Rs 1,96,000 crore.

"New projects announced under the public-private partnership model have received good respond from developers. These projects are seeing capital commitment from the private sector which is feeling more confident than before," said Virendra Mhaiskar, chairman and managing director at IRB Infrastructure Developers.

The data compiled by ETIG from the Centre for Monitoring Indian Economy reveal that the growth in investments was primarily driven by electronic and chemical manufacturing, roads, and ports.

The Anil Agarwal-led Vedanta Group made the biggest investment commitment in the period to set up a Rs 40,000 crore liquid crystal display (LCD) panel fabrication facility. The Adani Group committed Rs 25,000 crore on a coal-to-poly-generation facility and a rice bran solvent extraction plant and refinery, both in Chhattisgarh.

"Capital investment has gone up and even venture capital inflow has increased, indicating certain degree of economic activity that wasn't happening earlier. The capex numbers and the IIP data as well indicate an overall positive trend, but we can only call it a recovery if the growth is sustained," said Anis Chakravarty, chief economist and senior director at Deloitte India.

"There is some degree of confidence coming back in investments among bigger groups and even small and medium enterprises, partly due to the interest rate cut and partly as the input costs have remained stable," he said.