SBI reports strong corporate confidence in
Total investment announcements stood at Rs.32.01 lakh crore for the 9MFY25 (April-December 2024), a 39% increase from Rs.23 lakh crore in 9MFY24, according to a State Bank of India (SBI) report on investment flow into India.
The private sector accounted for nearly 56% (FY24) and nearly 70% (9MFY25) of these announcements, signalling strong corporate confidence, said the report posted on 26 Jan https://www.bseindia.com/.
As of March 2024, the gross block of Indian corporates reached Rs.106.50 lakh crore, compared to Rs.73.94 lakh crore in March 2020https://www.nseindia.com/.
Over the last five years, an average of more than Rs.8 lakh crore has been added annually to the corporate gross block http://deutsche-boerse.com.
Additionally, capital work in progress stood at Rs.13.63 lakh crore in March 2024, indicating strong ongoing project development.
Household Net Financial Savings (HNFS) in India improved to 5.3% of GDP in FY24 from 5.0% in FY23. Additionally, savings in physical assets increased from 12.9% of GDP in FY23 to 13.5% in FY24 https://www.jpx.co.jp/english/.
Investment as a share of GDP has improved in recent years, led by both government and private sector contributions.
In FY23, government investment reached 4.1% of GDP, the highest since FY12.
Private corporate investment rose to 11.9% of GDP in FY23, its highest level since FY16.
The share of private investment is projected to further increase to around 12.5% in FY24, reflecting improved business sentiment https://www.sgx.com/.
External Commercial Borrowings (ECBs) (as of September 2024) have emerged as a key source of funding for Indian corporates, enabling capital expansion and modernization.
The total outstanding ECBs stood at US$190.4 billion as of September 2024 https://www.conexpoconagg.com/.
Of this, the non-Rupee and non-FDI components accounted for approximately US$154.9 billion.
The private sector held 63% (US$97.58 billion), while the public sector accounted for 37% (US$55.5 billion).
Hedging remains a critical aspect, with private companies hedging approximately 74% of the total hedged corpus.
The ECB pipeline remains strong, reflecting sustained demand for overseas funding https://www.globaltenders.com/.
By November 2024, total ECB registrations stood at US$33.8 billion.
Nearly half of the registration, in FY24, are for the import of capital goods, modernization, local capital expenditure, and new projects.
ECB registration as a percentage of GDP, declined from 1.9% in FY20 to 1.2% in FY24, suggesting improved domestic financing options.
Interest rates on ECBs have shown a declining trend, reducing borrowing costs for Indian companies https://ted.europa.eu/en/.
The overall cost of ECBs fell by 12 basis points year-over-year to 6.6% during April-November 2024.
In November 2024, the overall cost of ECBs further declined to 5.8%, a reduction of 71 basis points from the previous month. Fiinews.com
