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Capital expenditure of listed companies was relatively resilient than the 'investment rate' in the pandemic-hit FY21.

An ICICI Securities report noted that in the pre-pandemic period of FY20, 'nominal investment rate' dipped to 28.8 per cent while the share of 'non-financial corporations' in the overall GFCF (Gross fixed capital formation) was relatively weak at 46 per cent as compared to the 5-year average (FY15-20) of 48.3 per cent.

In the pandemic year of FY21, the 'nominal Investment rate', dipped further to 27.1 per cent which translates into a 9 per cent dip in GFCF to Rs 53.5 trillion.

"However, capex in the listed corporate space was relatively better with cash spent on 'plant property and equipment' (PPE) falling by 6.6 per cent YoY to Rs 5.1 trillion in FY21 while including acquisitions and investments in subsidiaries it was flat YoY at Rs 5.6 trillion," it said. Consequently, the ratio of listed space capex to GFCF improved in FY21 to 10.5 per cent.

While the aggregate capex by listed India Inc was relatively resilient, the CFO (cash flow from operations) generated by them grew sharply by 25 per cent YoY to reach Rs 11.9 trillion in FY21 largely driven by cyclical stocks.

"Ratio of CFO to capex for India Inc has reached a 2-decade high of 2.2x, which was last realised around the commencement of the previous capex cycle in FY02-04 and bodes well for future capex as demand and utilisation levels improve," it said.

CFO after deducting interest obligations of Rs 2.1 trillion is still high at 1.7x capex, as per the report. Net result is that aggregate debt dipped by Rs 1.3 trillion during FY21 which is having its impact on Industry credit growth and the piling up of cash and investments to Rs 23 trillion at the end of FY21.