The metallurgical sector attracted the maximum investment commitment out of 38 sectors tracked by the Department of Industrial Policy and Promotion (DIPP) in January-October, 2013, with projects worth Rs 1.1 lakh crore lined up under industrial entrepreneur memorandums signed between industrialists and various State Governments.

This amounted to nearly a quarter of the total commitments of Rs 4.7 lakh crore that came in during the period. Among the projects cleared was Uttam Galva Metallics’ 50,000-tonnes-per-annum galvanised steel and products unit and a separate 1 lakh tonnes per annum cold-rolled and hot-rolled steel and products plant at Wardha, Maharashtra; Motherson Sintermetal Technology’s 5,000 tonnes per annum power metal components factory in Puducherry; Apple Industry’s 50,000-tonnes-per-annum sponge iron plant at Noida, Uttar Pradesh; Manaksia Ltd’s coated metal plant at Kutch, Gujarat; and Bhushan Power & Steel’s proposed steel processing unit at Daridabad, Haryana. The proposed investment will come through 217 projects, which was equivalent to 10.6 per cent of the total number of projects for which IEMs were signed.

Power play The electrical equipment sector was another hot sector for investment during the period, attracting 16.7 per cent of the total value of project commitments by value and 5.3 per cent of the total number of project commitments during the period. With power demand soaring in the country, setting up units for electricity transmission and distribution, besides other allied activities, is likely to be a lucrative proposition.

Among the projects was Periyar Energy’s proposed 2,246-MW coal-based thermal plant at Pudukottai, Tamil Nadu; Trinity Transformers’ transformer plant at Mahaboobnagar, Andhra Pradesh; Kindle Engineering and Construction’s solar plant at Patan, Gujarat; UM Power’s 250-MW thermal plant at Oraiya, Uttar Pradesh; and Sintex Power’s 1,320-MW coal plant at Amreli, Gujarat.

In 2012, the electrical equipment sector was the top sector for investment, attracting over 50 per cent of the total spending commitment during the year. In contrast, metallurgical industries cornered just 25 per cent of the investment quantum and 12.2 per cent of the total number of projects, coming second in the list.

Investment intentions The other hot sector for investment in 2013 has been textiles, which attracted investments worth Rs 78,790 crore in the first ten months of the calendar year. The data indicates that competition from other low-cost manufacturing hubs like Bangladesh and Sri Lanka notwithstanding, the textiles business remains an attractive opportunity for industrialists across the country. This was also the sector where the maximum number of project commitments was made, with 249 projects equivalent to 12.2 per cent of the overall projects tally for the 10-month period. Textiles displaced metallurgical industries in the project commitments list for 2013.

Some of the major projects proposed in this sector are a textile park being set up by Amitara Green Hi-Tech Textiles Park at Kheda, Gujarat; Soma Textiles & Industries’ cotton fibre preparation and spinning unit at Ahmedabad, Gujarat; Vaneera Industries’ cotton yarn and cotton blended yarn factory at Sehore, Madhya Pradesh; and DC Polyesters’ man-made fabrics plant at Thane, Maharashtra.

While it is conceivable that the investment commitment in 2013 will reach the same level seen in 2012, when a total of 5,828 projects worth Rs 5.7 lakh crore were committed, the quantum and value of the IEMs signed this year is unlikely to attain the five-year peak of Rs 17.4 lakh crore achieved in 2010.

>arvind.jayaram@thehindu.co.in

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