Corporate capex growth hit speed bump in FY24

After picking up pace in 2022-23 (FY23), growth in capital expenditure (capex) by the corporate sector in capacity expansion and new projects slowed in 2023-24 (FY24).

- KRISHNA KANT

The combined fixed assets of India's top 990 listed companies, excluding banks, financial services, and insurance (BFSI), and stockbroking firms, increased by just 7.6 per cent year-on-year (Y-o-Y) in FY24, down from 12.2 per cent a year earlier.

The slowdown was across the board and companies in most key sectors.

The combined fixed assets of the non-BFSI sector excluding oil and gas companies (including Reliance Industries) were up 6.3 per cent Y-o-Y in FY24, down from the 9.9 per cent a year earlier.

Similarly, the combined fixed assets of non-BFSI companies excluding oil and gas and mining and metals companies were up 5.4 per cent Y-o-Y in FY24, slowing from the 8.9 per cent a year ago. (See the adjoining charts).

Oil and gas and mining and metal companies such as Reliance Industries, Oil and Natural Gas Corporation, Indian Oil, Tata Steel, JSW Steel, Hindalco, and Coal India are two of the most capital-intensive sectors in the country.

The firms in these two sectors together accounted for 30 per cent and 15 per cent of the fixed assets of all companies, respectively, in the sample in FY24.