Fresh Investment sharp decline in PROJEX

The month of July 2012 ended with a drastic fall in projex. A total of 636 fresh projects, worth Rs. 16,608 crore were announced during the month, as against 653 projects worth Rs. 32,225 crore in June 2012. The reasons for such a fall can be attributed firstly to, the absence of mega projects, whose number is on the decline since the last couple of months. Secondly, the promoters of 318 projects were yet to finalize their actual investment figures.

Among the sectors, Electricity sector topped the investment chart with Rs. 8,713 crore spread across 31 startups accounting to 53 per cent of the total investment announced during the month. Essel Infraprojects' coal based power unit in Madhya Pradesh worth Rs. 6,000 crore was a notable project seen during the month. The Non-Conventional power sector (Solar, Wind, Biogas, Waste based energy) with 19 projects secured an investment worth Rs. 2,555 crore during the month. The Services and Utility sector managed to attract 512 start ups entailing a total investment of Rs. 4,061 crore. Kandla Port plans to set up a dry bulk terminal worth Rs. 1,060 crore. In terms of number the Real Estate sector saw a total of 177 projects worth Rs. 81 crore, wherein promoters of 170 projects have either not finalised the project cost or don't want to reveal the same. The Roadways sector managed to attract a total of 117 projects. However, as most of the projects were small in size, the total projex added to around Rs. 752 crore. The Manufacturing sector amassed 80 projects worth Rs. 2,127 crore during the month. Trumboo Cements plans to set up an ordinary portland cement unit worth Rs. 500 crore in Jammu Kashmir. Apart from this, NSL Sugars plans to expand its sugar capacity from 1,250 tccpd to 7,500 tccpd at a cost of Rs. 362 crore in Gulbarga district of Karnataka. Close on the heels of Manufacturing sector was the Mining sector with six projects securing an investment of Rs. 1,540 crore. Mineral Enterprises plans to set up an iron ore pellets unit worth Rs. 1,000 crore in Karnataka. Rashi Steel & Power plans to set up an iron ore beneficiation unit worth Rs. 500 crore.

The decline in prices of Indonesian coal last month has given some relief to the Indian coal importers. However,
according to sources the market conditions were expected to remain vulnerable for at least another three months.
Even though coal prices, globally has been falling since early 2012, the Indian importers could not reap the enefits
due to the falling rupee against the U.S dollar. However, the recent sharp drop in prices has resulted in Indian
consumers gaining around 10 to 12 per cent in rupee terms compared last year.

On the Irrigation front, seven new projects of small and medium sizes were planned by the state governments. Sardar Sarovar Narmada Nigam plans to implement Gagodhar sub branch canal at a cost of Rs. 107 crore in Gujarat.

Among the states, Madhya Pradesh has emerged as the top investor of the month with 49 projects worth Rs. 6,737 crore accounting for 41 per cent of the total investment emanated during the month. Followed by Maharashtra, Uttar Pradesh, Karnataka and Andhra Pradesh on the investment chart.

As far as the number of projects is concerned, Maharashtra tops the chart with 156 projects entailing an investment of Rs. 1,452 crore. Of the total projects, 107 startups came from the real estate sector. An investment of Rs. 1,060 crore came from the Solar based power sector spread across four projects.

Around 325 projects worth Rs. 4,091 crore were announced by the government sector, majority of which (280 projects) are owned by the state government agencies. However, in the private sector, domestic companies dominated the chart with a combined investment of Rs. 12,427 crore across 304 new projects. The private sector including foreign companies came up with 311 projects worth Rs. 12,517 crore which accounted for around 75 per cent of the total fresh investment during the period.