Total investments in 9 months surpassed Rs 32 lakh crore mark: SBI Report
By TIOL News Service
NEW DELHI, JAN 27, 2025: INDIA'S investment ecosystem and external commercial borrowings (ECBs) have witnessed significant developments over the past few years. The recent report by the State Bank of India (SBI) has highlighted trends in investment announcements, private sector's contribution, and role of ECBs in corporate financing.
Investment Announcements
Investment activity in India continues to grow at a rapid pace, with significant contributions from the private sector.
In 9MFY25 i.e., the nine months of FY25 (April-December 2024), total investment announcements stood at Rs. 32.01 lakh crore.
This marks a 39% increase from Rs. 23 lakh crore in 9MFY24, reflecting a positive investment outlook.
The private sector accounted for nearly 56% (FY24) and nearly 70% (9MFY25) of these announcements, signaling strong corporate confidence.
Gross Block of Indian Corporates
As of March 2024, the gross block of Indian corporates reached Rs. 106.50 lakh crore, compared to Rs. 73.94 lakh crore in March 2020.
Over the last five years, an average of more than Rs. 8 lakh crore has been added annually to the corporate gross block.
Additionally, capital work in progress stood at Rs. 13.63 lakh crore in March 2024, indicating strong ongoing project development.
Household Net Financial Savings
Household Net Financial Savings (HNFS) in India improved to 5.3% of GDP in FY24 from 5.0% in FY23. Additionally, savings in physical assets increased from 12.9% of GDP in FY23 to 13.5% in FY24.
Investment as a Percentage of GDP
Investment as a share of GDP has improved in recent years, led by both government and private sector contributions.
In FY23, government investment reached 4.1% of GDP , the highest since FY12.
Private corporate investment rose to 11.9% of GDP in FY23, its highest level since FY16.
The share of private investment is projected to further increase to around 12.5% in FY24, reflecting improved business sentiment.
External Commercial Borrowings (ECBs) (as of September 2024)
ECBs have emerged as a key source of funding for Indian corporates, enabling capital expansion and modernization.
The total outstanding ECBs stood at USD 190.4 billion as of September 2024.
Of this, the non-Rupee and non-FDI components accounted for approximately USD 154.9 billion.
The private sector held 63% (USD 97.58 billion) , while the public sector accounted for 37% (USD 55.5 billion).
Hedging remains a critical aspect, with private companies hedging approximately 74% of the total hedged corpus.
ECBs in FY25 (Up to November 2024)
The ECB pipeline remains strong, reflecting sustained demand for overseas funding.
By November 2024, total ECB registrations stood at USD 33.8 billion .
Nearly half of the registration, in FY24, are for the import of capital goods, modernization, local capital expenditure, and new projects.
ECB registration as a percentage of GDP, declined from 1.9% in FY20 to 1.2% in FY24, suggesting improved domestic financing options .
ECB Cost Trends (April-November 2024)
Interest rates on ECBs have shown a declining trend, reducing borrowing costs for Indian companies.
The overall cost of ECBs fell by 12 basis points year-over-year to 6.6% during April-November 2024.
In November 2024, the overall cost of ECBs further declined to 5.8%, a reduction of 71 basis points from the previous month.
Clarification on ECB Data
Recent reports have misrepresented India's ECB liabilities, leading to confusion.
Some media sources incorrectly reported that India's ECB stock reached USD 273 billion by early 2025.
However, the actual outstanding ECB, as per RBI data (September 2024), is USD 190.4 billion.
The discrepancy arises from the inclusion of USD 72.057 billion in Foreign Portfolio Investments (FPIs) - Debt investments in long-term corporate and government securities, which should not be classified as corporate ECB liabilities.
