Indian conglomerates are poised to nearly triple their investments to around $800 billion over the next ten years, according to a report by S&P Global Ratings. The measure aims to boost growth while steering the economy towards a more sustainable future.
Around 40% of these investments will be allocated to new businesses, including green hydrogen, clean energy, semiconductors, electric vehicles and aviation, as pointed out by S&P Global. India’s largest business groups, such as Adani Group, Reliance Industries and Tata Group, are expected to invest approximately US$350 billion in these areas, according to an analysis conducted by Neel Gopalakrishnan.
These investments are in line with the vision of India’s political leadership, which seeks to reduce dependence on fossil fuels to drive economic growth. India, the world’s third largest carbon emitter, needs around US$12.4 trillion in investments to achieve the goal of carbon neutrality by 2070.
READ MORE: With drought and fires, sugar from Brazil loses space to Thailand and India
Other conglomerates, such as the Birla, Mahindra, Hinduja, Bajaj and Murugappa groups, will continue to focus on their already established areas, with the aim of “expanding scale and profitability”, according to the report. Between US$400 billion and US$500 billion of total investments are expected to be directed to existing businesses.
While countries like the United States and South Korea have a long tradition of family business groups dominating their local economies, conglomerates led by figures like Mukesh Ambani and Gautam Adani, the two richest men in Asia, continue to exert enormous influence in India. The growth of these groups reflects the policy priorities of the Indian government.
READ MORE: To circumvent sanctions, Russia proposes that BRICS develop a payment system
S&P Global estimates that these conglomerates are expected to expand their market share in the coming years, ensuring a significant advantage over single-sector competitors, especially in capital-intensive segments.
However, this growth path is not without risks. The report points out that companies may face execution risks and rely heavily on loans, with uncertainty about the return on new technologies. As debt levels rise, it will be essential for companies to strengthen their core businesses to maintain their credit ratings. Any underperformance during the investment phase could impact credit metrics.
