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ARTHA



                India’s Private Capex Cycle:



                Evidence of an Emerging



                Investment Revival






































                O    ver the past several years, public capital    Against this backdrop, this article examines recent

                                                                   trends in private investment using firm-level balance
                     expenditure has played a leading role in
                     supporting investment activity and infrastructure
                creation in the country. However, a durable        sheet data from CMIE’s Prowess database and
                                                                   project-level information from the CMIE Capex
                strengthening of the investment cycle requires a   database to assess both realised corporate
                broad-based pickup in private sector capex that    investment and emerging investment intentions.
                expands productive capacity across manufacturing
                and services. The trajectory of private investment   The analysis points to emerging signs of a revival in
                therefore holds important implications not only for   India’s private capex cycle. Firm-level balance sheet
                medium-term growth, but also for employment        data indicate that realised corporate investment has
                generation and the overall dynamism of the economy.  strengthened over the past three fiscals, with FY25
                                                                   recording the highest level of investment in the sample
                India’s private investment cycle has been uneven over   period. At the same time, project-level data suggest a
                the past decades. After a strong expansion during the   significant increase in fresh investment
                mid-2000s, private capex slowed after 2011 amid    announcements during FY26 so far, led primarily by
                rising corporate leverage, stalled infrastructure   manufacturing and electricity, indicating a
                projects, and banking sector stress. The subsequent
                period was marked by balance sheet repair in both the   Private corporate capex in India has
                corporate and financial sectors. In recent years,     begun to recover after a prolonged
                deleveraging, improved corporate profitability, and the   phase of moderation, supported by
                resolution of stressed assets have strengthened the
                macro-financial conditions for renewed investment,    stronger balance sheets and
                alongside a sustained public infrastructure push.    improved profitability





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