According to a State Bank of India (SBI) report, Indian companies made investments totaling over Rs 32 trillion during the first nine months of the current financial year, marking a 39% increase from Rs 23 trillion in the same period last year. Private sector contributions to these investments have risen to 70%.
A robust pipeline of Rs 13.63 trillion in ongoing capital projects (expected to be completed by March 2024) suggests continued strong growth in the years ahead.
In FY23, government investment reached 4.1% of GDP, the highest since FY12, while private sector investment stood at 11.9% of GDP, the highest since FY16. Preliminary data for FY24, expected by February-end, may show private investment approaching 12.5% of GDP.
External commercial borrowings (ECBs) have also played a significant role in funding for Indian companies, with outstanding ECBs reaching $190.4 billion as of September 2024, a slight increase from previous quarters. Of this, $155 billion is from non-rupee and non-FDI components, offering more stability due to their lower volatility from hedging. Private companies account for 63% ($97.58 billion) of these borrowings, with 74% of their exposure hedged.
Overall, two-thirds of total ECBs were hedged as of September 2024, up from 55% two years ago. The unhedged portion is partly backed by government guarantees or relies on natural hedges, such as earnings in foreign currency, which accounted for about 1.5% of the unhedged ECBs as of September 2024.
ALSO READ: Investor Boom: NSE Registers 1 Crore New Investors In 5 Months, Reaches 11 Crore Milestone
