India Inc on investment binge

Top 300 firms to pump Rs 320,000 crore over next 12-18 months.

India Inc has lined up investments of Rs 3.2 trillion (Rs 320,000 crore) to be made over the next 12 to 18 months. Senior bankers estimate that greenfield projects will account for roughly half of these investments.

The top 300 companies of the country are busy giving final touches to their investment plans in consultation with their bankers.

If one takes into account the proposals that have been on the drawing boards of small and medium companies, the total corpus that can be invested over the next one-and-a-half years runs into Rs 4 trillion (Rs 400,000 crore), according to analysts.

A substantial chunk of this money "� at least 50 per cent "� will come from internal accruals of these companies. Bankers expect about 25-30 per cent of the overall fund requirement "� close to Rs 1 trillion (Rs 100,000 crore) "� to be sourced from domestic financial intermediaries, while the rest will be raised from capital markets and vanilla debt and bonds overseas.

This is the largest investment pipeline ever seen in Indian corporate history. Last year, non-food credit of the banking sector grew by Rs 203,044 crore. However, credit to medium and large industries was to the tune of Rs 42,976 crore, or about 21 per cent of the total non-food credit.

This year so far, the non-food credit of the banking system has grown by Rs 104,098 crore.

According to the corporate credit divisions of a few large banks, telecom and power account for 20 per cent each of the investment pipeline, followed by oil and gas (15 per cent) and metals other than steel (12 per cent).

A string of new steel projects accounts for about seven per cent of the investment pie while roads account for five per cent. Statistically, India's top 10 companies' share in the investment pipeline is about 40 per cent or Rs 1,25,000 crore.

State-wise, Jharkhand tops the list of investment destinations, followed by Orissa, Uttar Pradesh, Gujarat and Maharashtra. West Bengal's share of the pie is minuscule now but over the next six months, the Left-ruled state is likely to see significant investment commitments, say bankers.

Jamnagar, Hazira and Dahej in Gujarat; Paradeep in Orissa and Ennore in Tamil Nadu will witness an investment "boom" over the next 18 months.

BUILDING BLOCKS
Who will invest: India's top 300 firms

Where will the money come from: 50% from internal accruals; 20% from overseas debt and bonds; the rest from domestic banks

Where will the money go: 20% each to telecom and power; 15% to oil & gas; 12% to metals and 7% to steel

How will the money be spent: 50% on greenfield projects and 50% on brownfield expansions