Backed by Rs 172,000-crore of cash pile and an aggressive push by the Modi government, it\u2019s public sector giants like ONGC, Nalco, and Coal India that are leading investments in new projects in the current fiscal even as private sector companies are taking a backseat.<\/p>\n
Among the PSUs, mining major Nalco has announced investments of Rs 65,000 crore including a smelter and power complex at a cost of Rs 22,000 crore in Odisha, while Coal India said it would invest Rs 62,500 crore in the next five years to increase its production to 908 million tonne by 2020. Oil explorer, ONGC announced plans to invest Rs 41,678 crore to increase its oil and gas production. Another big bang investment will be made by Indian Oil which plans to expand capacity of its 10 refineries and make fresh investments in infrastructure and other facilities, considering the future demand for energy, its Chairman B Ashok said.<\/p>\n
Transmission tower firm PowerGrid said it will invest Rs 22,500 crore in fiscal 2016 alone and a massive Rs 100,000 crore in five years.<\/p>\n
Though the PSUs’ cash pile fell from Rs 190,600 crore in fiscal 2014 to Rs 172,000 crore in fiscal 2015, the public sector units are leading the way as the Indian government wants the economy to turnaround faster.<\/p>\n
CEOs say for PSUs there is no problem in raising funds. \u201cWe have lined up Rs 60,000 crore worth of investment in metal and energy space over the next five years and we do not have any constraint in funding. We have comfortable reserves and can raise Rs 600 to 700 crore annually from internal accruals. My aim is to double the turnover of Nalco from about Rs 8,000 crore now by the end of my tenure,\u201d said TK Chand, the new CMD of Nalco.<\/p>\n
In a big positive for the PSUs, analysts said auction-based natural resources allocation will lead to a significant transfer of wealth from the private sector to public sector. As per Barclays analysis, as much as $300 billion over the next 25-30 years of potential private sector surplus will now be captured by the public sector, under the new auction-based regime for all mineral resources. <\/p>\n
The Modi government auctioned coal mines after the Supreme Court cancelled allotments made by successive governments in the last 20 years.<\/p>\n
Among the private sector companies, Reliance Industries, JSW and Ultratech are few of the companies which are investing in new projects as capacity utilisation of top 500 companies fell to 10-year low in fiscal 2015.<\/p>\n
Though the RBI governor asked Indian companies to invest, CEOs are not enthused. \u201cThe recent rate cut would provide the much needed fillip to the domestic industry in the times of bleak global scenario. But more is required to to stimulate India Inc to make big ticket investments,\u201d said Sajjan Jindal, Chairman of the JSW group. JSW has lined up Rs 10,000 crore of investments in power and steel sector apart from buying Jaypee group hydro power companies in Himachal Pradesh.<\/p>\n
\u201cWith surplus capacity in most industries, there would tend to be less investment at this time when demand is slack. Even in the industries which are investing in new projects, it is more company specific and not generalised as we have already witnessed decline in capital formation in the first quarter,\u201d said D R Dogra of Care Ratings.<\/p>\n
Deep Mukherjee, Director of rating firm, Ind-Ra says the current levels of revenue growth or operating profit growth may not encourage Indian corporates to spend in new projects. Besides, a substantial number of corporate have high leverage. Thus, even if any company wants to make heavy duty capital expenditure, they may not find capital at competitive costs. \u201cBesides, most of them are unlikely to have sufficient internal accruals to take up capex, given the fiscal 2015 performance,\u201d he said.<\/p>\n","protected":false},"excerpt":{"rendered":"
Backed by Rs 172,000-crore of cash pile and an aggressive push by the Modi government, it\u2019s public sector giants like ONGC, Nalco, and Coal India that are leading investments in new projects in the current fiscal even as private sector companies are taking a backseat. Among the PSUs, mining major Nalco has announced investments of Rs 65,000 crore including a smelter and power complex at a cost of Rs 22,000 crore in Odisha, while Coal India said it would invest Rs 62,500 crore in the next five years to increase its production to 908 million tonne by 2020. Oil explorer, […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[133],"tags":[],"class_list":["post-35665","post","type-post","status-publish","format-standard","hentry","category-oil-gas"],"acf":[],"_links":{"self":[{"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/posts\/35665","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/comments?post=35665"}],"version-history":[{"count":0,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/posts\/35665\/revisions"}],"wp:attachment":[{"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/media?parent=35665"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/categories?post=35665"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/tags?post=35665"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}