The Hindu Business Line : Corporate India plans big on capex

CALL it the feel good factor or Corporate India's positive outlook on the future demand situation, 27 listed companies have announced capital expenditure plans aggregating to Rs 39,000 crore in January 2004.

If one adds the capex plans of unlisted companies, the amount is higher at Rs 64,000 crore. Ten other companies have announced capital expansion programmes without mentioning the amount involved.

The aggregate size of capital expenditure plans appears large considering that additions to gross fixed assets of companies were only about Rs 28,800 crore in 2002-03 and Rs 56,700 crore in 2001-02. In the case of individual companies too, the capital expenditure plans are much larger than the addition to gross fixed assets in 2002-03. For instance, Ashok Leyland added Rs 122 crore to its fixed assets in 2002-03 but it has now announced plans for Rs 390 crore. Similarly, in the case of Bharat Forge, Shipping Corporation and Raymond, the proposed expenditure is three to five times higher than their actual expenditure in 2002-03.

Plans announced by Reliance, GAIL (India), Sahara, NPC and Jindal Steel alone accounted for Rs 58,750 crore. However, companies operating in a wide range of segments ranging from aluminium to oil and from paper to textiles have also announced new projects.

Some of the other major players that have announced expenditure programme include ONGC, Ashok Leyland, Indo Rama Synthetics, Raymond and Bharat Forge.

Hectic activity appears to be afoot in the oil & gas and the power sector with investments of Rs 38,750 crore on the anvil.

Of the total 27 listed companies that have announced capex plans, 14 companies have investment plans of Rs 100 crore and above.

The capex plan of GAIL (India) is the highest at Rs 20,000 crore; Hydro S&S is the lowest at Rs 4 crore.

Among the unlisted companies the capex plan of Sahara is the highest at Rs 20,000 crore.

The company has plans to use the money for developing townships in Uttar Pradesh. Nuclear Power Corporation and Cordite Factory were among the other unlisted companies that have unveiled large capex plans.

Companies that have announced plans but have not disclosed the amount include Colgate Palmolive, Asahi India Glass, Finolex Industries, and Nava Bharat Ferro Alloys.

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