Indian cos likely to spend more on capex, says survey

Corporate India is expected to spend the most on capital expenditure followed by inorganic growth opportunities and debt repayment purposes, Fitch Ratings survey of investors said today.

"... There will be an increase in the deployment of corporate cash in 2010. 50 per cent of investors see more cash being used for capex. Other areas include mergers and acquisitions (33 per cent) and debt repayment (25 per cent)," according to Fitch Ratings' Fixed Income Investor Survey.

Senior investment personnel from Fixed Income Market participated in the survey that was conducted during July - August.
    
As per the credit rating agency's survey, a whopping 94 per cent of those surveyed viewed inflation and rising interest rates as main threats to Indian debt markets, followed by global sovereign issues (66 per cent) and budget deficit (64 per cent).
    
"Security concerns (43 per cent) in India were also a notable threat to the growth in the market," the survey said and added that fundamental credit conditions would improve across all the sectors, except in telecom, in the coming months.
    
Regarding recapitilisation of banks, 75 per cent of the participants said they anticipated the government to continue with capital infusion into banks over the next 12 months.
    
According to the report, European sovereign debt crisis and  slow US economic recovery in the US have not adversely impacted investor sentiment towards India.
    
"Most investors anticipate economic expansion of over eight per cent in India in 2010 and believe credit quality will improve across investment sectors," it added.
    
As many as 74 per cent of those surveyed felt that the country would not be affected by the recent debt crisis in Europe.