Corporate Capex Of Listed Non-Financials Breaches Rs 11 Lakh Crore; Outpaces Government: ICICI Securities

Corporate capex of the listed non-financial space breached Rs 11 lakh crore in fiscal 2025, outpacing the central government capex, according to data collated by ICICI Securities.

Corporate capex grew by 20% on an annual basis in FY25, outpacing the central government capex at Rs 10.5 lakh crore. "The hallmark of FY25 corporate capex spending pattern is the broad-based nature of growth, wherein 157 corporates embarked on capex of over $100 million which is the highest number of companies since 2013," according to the report, authored by Vinod Karki and Niraj Karnani. At the peak of capex cycle in 2012, 175 listed companies embarked on minimum capex of $100 million ($100 million was equivalent to Rs 4.8 billion in 2012 vs Rs 8.5 billion currently).

Reliance Industries Ltd., while still maintaining the biggest pie of corporate capex, witnessed flat growth, also indicating that the broad-based nature of capex supported growth.

The largest contributors to growth in capex during FY25 include utilities, energy (ex RIL), industrials, cement, auto and healthcare. Capital-intensive sectors where capex growth was muted include telecom and RIL (assumed as a separate sector given the diversity and the size of capex spend).

Fiscal and monetary policy remains conducive for the corporate capex cycle to pick up further, the report expects. The government’s fiscal deficit is expected to reduce further to about 4.4% of GDP which will not pressurise credit markets for funding private capex.

Also, despite a falling fiscal deficit, the six-month government capex hit a record of Rs 7.5 lakh crore on back-ended FY25 and front-ended FY26, even though the FY26 budget outlay was underwhelming at Rs 11 lakh crore. Aggressive frontloading of capex opens up prospects for an upward revision to BE for FY26 government capex as it happened for FY25 RE, the analysts said.

Monetary policy has been extremely growth oriented since December 2024 when the first CRR cut of 50 basis points was announced followed by a slew of measures to boost liquidity in the system, including another 100 basis points CRR cut announced, which will be effective in tranches over CY25 and 100 basis points of repo rate cuts calendar year-to-date.

The domestic environment remains conducive while global situation offers both challenges and opportunities. "Domestic policy environment has gone on an overdrive to revive capex in terms of both fiscal and monetary policy and it is now up to the corporate sector to ignite its animal spirit for the cycle to pick up," the report stated. The global environment triggered by geopolitics is clearly raising uncertainty, but there are signs of some relative gains for India in terms of efforts to shift global supply chains away from China, it added.