72nd Survey of Projects Investment in India

Survey Highlights:

• Revival seen in the private sector investment in Q1 spilled over to Q2
• Central government stepped up its projex spending
• Slowdown seen in state government-sponsored projex
• Odisha, the most beneficiary state of fresh investment
• Andhra Pradesh attracted the highest private fresh projex
• After several lull quarters, projex revival seen in the Mining sector
• Mega projects in the Manufacturing sector reflect signs of revival
• Steel, cement, aluminium, automobiles and electronics attracted private investment
• Distressed thermal power projects face the heat of RBI guidelines
• Solar project promoters in a confused state
• Fresh projex from a couple of states to slow down further due to elections in December 2018
• Revival in construction activities, good monsoon and increase in rural demands augurs well for projex in India during 2018-19

The 72nd Projex Investment Survey of Projects Today reveals that 2,826 new projects worth Rs 3,07,137.24 crore were announced in the second quarter of the current fiscal (Q2/FY19). Increase in the share of the Manufacturing sector in total fresh projex and successive second quarter growth in private projex are major findings of the 72nd Projex Survey.

Fresh projex (projects expenditure) increased by an impressive 47.8 percent during Q2/FY19 as against a fall of 29.6 percent observed in Q1/FY19 on quarter-on-quarter basis. In Q1/FY19, 2,698 projects worth Rs 2,07,824 crore were announced. Further, the number of mega projects (investment of Rs 1,000 crore or more) also increased from 36 in Q1/FY19 to 40 in Q2/FY19. Mega projects reflect confidence of project promoters to commit more funds in the prevailing investment environment.

Private projex growth rate impressive

The private sector announced 226 more new projects in Q2/FY19 and showed signs of sustaining its increased fresh projex activities in Q2 too. As a result, fresh projex announced in Q2/FY19 increased by a healthy 35.3 percent on top of 21.1 percent growth recorded in Q1 of the current fiscal.

In all, the sector saw announcement of fresh investment to the tune of Rs 1,23,062.9 crore in the form of 869 projects. In Q1/FY19 private promoters had announced 643 new projects entailing a total investment of Rs 90,980.6 crore. Cement, steel, electronics, automobile ancillaries and construction sectors witnessed increased fresh private investment in Q2/FY19.

The three major South Indian states, Andhra Pradesh, Karnataka and Telangana, were the top three states favoured by private promoters.

In all, 25 mega projects were announced by private companies in Q2/FY19. Of these, Rs 15,000 crore telephone equipment project of Reliance Industries Jio was the largest. Greenko Solar Energy’s Rs 7,000 crore solar power project in Karnataka; Gulf Petrochem’s Rs 3,600 crore bitumen refinery project in Gujarat and StreamCloud’s Rs 2,200 crore data centre in Maharashtra were the other prominent private projects announced during this quarter.

The 15.9 percent fall in fresh investment by the state-owned agencies was fairly compensated by the Central government-owned entities. As a result, the total fresh projex by the government sector increased by a healthy 57.5 percent in Q2/FY19 of the current fiscal. In Q1/19, fresh projex by the government sector had recorded a decline of 47.4 percent on Q-o-Q basis.

As against 2,052 government projects worth Rs 1,16,843.4 crore announced in Q1/FY19, around 1,957 new projects worth Rs 1,84,074.3 crore were announced in Q2/FY19. Aluminium, Petrochemicals, Railways, Roadways and Lignite Mining sectors saw large-size investment proposals from the government entities. The Dedicated Freight Corridor Corpn., National Aluminium Co, NLC India and the National Highways Authority of India announced mega investment plans during the latest quarter ended September 2018.