Private capital expenditure (capex) in India recorded strong growth from FY21 to FY25E, with a compound annual growth rate (CAGR) of 19.8 per cent, according to a report by HDFC Securities. The report pointed out that this rise in private capex didn’t translate into a corresponding credit growth in the banking sector. It stated, “Private capex growth has been robust from FY21 to FY25E, reporting a CAGR of 19.8 per cent.... Private capex growth wasn't reflected in the credit growth of the banking system as almost entire capex was financed by strong cash flows from operations in this period, thus limiting the need for bank credit.” The top 250 listed private companies saw their capital investments jump from Rs 4,833 billion in FY21 to Rs 8,426 billion in FY24, and are projected to reach Rs 9,951 billion by FY25E. Key sectors driving this growth include oil and gas, power, automobiles, and commodities. Top 250 Private Firms Drive Capex Surge Using Internal Cash Flows HDFC Securities reported that the top 250 listed private firms (excluding BFSI) invested a total of Rs 29.6 trillion in capex from FY20 to FY24. These companies generated Rs 52.7 trillion in cash flow from operations over the same period, funding about 57 per cent of their investments without needing to rely on debt. This heavy use of internal accruals meant there was minimal impact on credit demand in the banking sector. The ability to self-finance large investments helped maintain healthy balance sheets and allowed firms to pursue long-term expansion plans without additional leverage. Central Government Capex Shows Strongest Growth at 24.3% CAGR Central government capital expenditure also showed a strong upward trend during this period. The report stated that central capex rose from Rs 4,263 billion in FY21 to Rs 10,184 billion in FY25E, clocking a CAGR of 24.3 per cent. Key contributors to this surge were ministries dealing with road transport, railways, defence, and transfer of capital grants to states. The government’s continued focus on infrastructure development played a major role in boosting this capex. This rising trend in public spending complemented the strong private sector investments seen during the same timeframe. State Capex Growth Slower; Faces Decline in FY25E State governments, however, showed a slower capex trajectory. From Rs 4,223 billion in FY21, state capex grew at a CAGR of 11.9 per cent to Rs 6,075 billion by FY25E (as of February 2025). Though state spending rose by 28 per cent, 11 per cent, and 26 per cent in FY22, FY23, and FY24 respectively, it saw a 20 per cent year-on-year decline in FY25E. States like Uttar Pradesh, Maharashtra, Madhya Pradesh, Tamil Nadu, Gujarat, and Odisha led the capex growth during this time. The slowdown in FY25E, however, has slightly dampened the overall public investment momentum. (With Inputs From ANI) Also Read: Neeraj Chopra Breaks 90-Metre Barrier, PM Modi Hails Historic Throw