Indian Conglomerates Set for $800 Billion Investment Boom

S&P Global Ratings highlights an $800 billion investment drive by Indian conglomerates over the next decade, focusing on both emerging and established sectors. Groups like Vedanta, Tata, and Reliance lead in sectors such as green hydrogen and EVs, while others like Birla and Mahindra concentrate on core business growth.

Indian business giants are preparing for significant capital investments totalling around USD 800 billion over the next ten years, as noted in a recent S&P Global Ratings report. This financial commitment is almost three times what these conglomerates allocated in the previous decade, marking a robust initiative towards expansion and diversification.

Approximately 40% of this forthcoming investment will target novel and burgeoning sectors such as green hydrogen, clean energy, aviation, semiconductors, electric vehicles, and data centers. Key players including the Vedanta, Tata, Adani, Reliance, and JSW groups are at the forefront, collectively readying a US$350 billion infusion into these industries over the next decade.

Neel Gopalakrishnan, an S&P Global Ratings credit analyst, commented, "About 40% of Indian conglomerates' forthcoming expenditures will focus on new ventures like green hydrogen, clean energy, aviation, semiconductors, EVs, and data centers. Leading groups are preparing approximately USD 350 billion for investment in these fields over the next decade." Even as some major Indian conglomerates explore fresh business terrains, others are anticipated to keep channeling capital into their established sectors, with aims to scale and improve profitability.

The report advises that conservative players such as Birla, Mahindra, Hinduja, Hero, ITC, Bajaj, and Murugappa are expected to persist with their current strategies, projecting ongoing investments in traditional sectors between USD 400 billion and USD 500 billion in the coming decade, based on recent spending patterns.

This focus on bolstering foundational operations will be vital as conglomerates navigate the financial complexities of substantial investment plans. With expected increases in debt to fund growth strategies, maintaining strong core business performance will be essential to preserve credit standings.

Failure to perform during expansion could adversely affect credit metrics, underscoring the necessity for conglomerates to implement growth strategies with precision. (ANI)

(With inputs from agencies.)