India Inc. Set to Double Capex Over 5 Years; S&P Says Credit Strength May Rise If Execution Stays On Track

Mumbai, 11 June 2025: Indian corporates are preparing for a substantial surge in capital expenditure, with projections by S&P Global Ratings suggesting a potential doubling of investments over the next five years. According to the global credit rating agency, this aggressive capex cycle could strengthen credit profiles, assuming execution remains on target and external macro conditions stay favourable.

S&P’s Insight: Strong Growth Backed by Solid Fundamentals

In its latest report titled “Indian Inc.’s Spending Spree Will Likely Pay Off,” S&P Global Ratings states that Indian companies are leveraging a combination of healthy macroeconomic fundamentals, deleveraged balance sheets, and pro-reform government policies to drive the next wave of growth.

“Indian corporates are positioned for sustained expansion,” said Neel Gopalakrishnan, Credit Analyst at S&P Global Ratings. “Unless hampered by poor execution or external shocks, this capex boost should support business scale without deteriorating leverage metrics.”

Key Highlights from the Report

• Indian corporate capital expenditure is forecasted to double within five years.
• Corporate balance sheets are at their strongest in years, creating financial room for expansion.
• The investment drive is demand-led, not fuelled by excessive borrowing, reflecting cautious capital management.
• A stable policy environment and positive economic outlook are major growth catalysts.

The report emphasises that while the capex outlook is optimistic, much depends on execution quality. If implemented well, the investments could expand operational capacity without impacting debt levels — a significant improvement over past investment cycles where overleveraging was a concern.

Sectoral Momentum and Government Support

The upcoming investment wave is expected to be driven by infrastructure, manufacturing, green energy, and digital services. Sectors are gaining momentum due to:

• Production-Linked Incentive (PLI) schemes
• Public infrastructure programmes
• The Make in India mission

These initiatives, backed by government spending and policy consistency, are expected to act as major enablers of the next corporate growth phase.

About the Report

S&P’s report provides a comprehensive forecast of medium-term capex trends and how they could reshape credit dynamics across Indian industries. The analysis indicates a shift in emerging markets like India, where corporates are increasingly capitalising on fiscal incentives and macro tailwinds to scale operations while safeguarding financial health.

About S&P Global Ratings

S&P Global Ratings is a globally recognised agency offering independent credit analysis, benchmarks, and ratings. Its insights influence capital market decisions, investment strategies, and regulatory frameworks around the world.

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