Indian Cos invests 81% of $104-bn in infrastructure

New Delhi: Over 81 per cent of the overall planned private investments of Rs 4,19,334 crore ($104 billion) by India Inc in the third quarter of the current fiscal have been poured into core, physical and service infrastructure.

According to the Assocham Investment Meter (AIM), which recently analysed industry’s Q3 private investment announcements and plans, of its total investments of Rs 4,19,334 crore across 28 sectors, Rs 3,41,308 crore ($85 billion) went to core, physical and service infrastructure.

Releasing the AIM here on Monday, Assocham President, Mr Venugopal N. Dhoot, said that while steel, with an investment of Rs 1,23,700 crore, remained the single largest source of investment generation, other industries attracting substantial capital expenditure included oil (Rs 62,850 crore), power (Rs 54,144 crore), telecom (Rs 33,080 crore), real estate (Rs 24,848 crore), cement (Rs 19,200 crore), shipping and logistics (Rs 11,536 crore), ports (Rs 10,750 crore) and aviation (Rs 1,200 crore).

Contributions

The steel sector contributed nearly 36.5 per cent to the overall investment, as a result of high domestic and export demand. The Abhijeet Group was the largest investment contributor with Rs 55,000 crore in the sector to be used in setting up plants in West Bengal, Jharkhand and Maharashtra, said Mr Dhoot. Within the oil sector, Essar Oil became the largest contributor, with an investment of Rs 24,000 crore to triple capacity at its Vadinar refinery.

The third largest investment happened in the power sector, fuelled by a surging demand by households as well as industry. In this sector, L&T made the largest investment announcements, worth Rs 20,000 crore, followed by Neyveli Lignite Corporation Ltd, with plans to invest an estimated Rs 17,500 crore to set up a mine and thermal power station in the Perambalur district of Tamil Nadu, he said.

Telecom growth

Mr Dhoot said that with the Indian telecom subscriber base growing to around 264.8 million in November 2007, there was a great growth potential in the sector with spectrum allocation for 3G and 2G mobile services, WiMAX broadband, lower tariffs, mobile number portability, and listing of infrastructure entities.

Despite high interest rates dampening the short-term demand for houses, Mr Dhoot, pointed out that real estate firms have maintained the investment momentum. The largest contributor in this sector was Vipul Infrastructure Developers Ltd, with Rs 13,000 crore to develop realty projects in Bhubaneshwar and Hyderabad in the next five years.

Cement build

Meanwhile, the Anil Dhirubhai Ambani Group was the largest investment contributor to the cement sector, with investments worth Rs 10,000 crore to set up four cement plants of five million capacity each in Madhya Pradesh. Other cement companies with major investment plans included ACC (Rs 4,000 crore), Shree Cement (Rs 2,500 crore), Shyam Group ($0.37 billion), and JSW Group ($0.3 billion).

As the number of air travellers increased by 38.5 per cent in 2006-07, demand for air services has surged.