Private Capex In India To Grow At 10-12% In FY24: Fitch

Rating agency Fitch Ratings on Monday said that the rising capital expenditure (capex) trend of Indian corporates is likely to continue and grow at 10-12 per cent in FY24.

It said that capex was flat between FY19 and FY20. In FY22 it grew at 16 per cent. The estimates are based on 8 state owned enterprises and 21 privately held Fitch-rated corporates in the country.

"We believe growth opportunities arising from India's supply-side policy steps in recent years, domestic corporates focusing more on localisation, and multi-nationals looking to reduce risk in global supply chains may attract higher private investment in the medium term," analysts at the rating agency wrote.

However, the analysts noted that progress that is slower-than-expected may present risks.

Fitch attributed government reforms such as the goods and services (GST) tax act, bankruptcy code and more recent measures such as a lower corporate tax rate, the PLI (production linked incentive) schemes and rising state spending on infrastructure to further boost investments.

On the banking sector’s health, it said that the banks have fixed their non-performing loans and improved their credit costs in recent years and are well positioned to support the funding needs to corporates.

However, currency pressures from high commodity prices and a weak global economic outlook present risks to India's investment demand as it remains a net importer of energy and exports 21 per cent of its output, Fitch said.