India?s leading industrial houses had been making heavy investments over the last three years. The rate of growth of their investments for the last three financial years had been in excess of 50% and their aggregate investment numbers more than doubled in the three-year phase.

An FE study of the investment growth of top 25 industrial houses, chosen according to sales numbers, shows the growth rate increased from 56.1% in 2007-08 to 58.1% in 2008-09. In absolute terms, the investment steadily increased from Rs 1.11 lakh crore in 2006-07 to Rs 2.73 lakh crore in 2008-09.

Thanks to the sustained investment growth, the share of investments in proportion to group assets also went up. The investment-to-assets ratio increased from 23.49% in 2006-07 to 27.52% in 2007-08 and then to 31.67% in 2008-09.

Kishor P Ostwal, CMD, CNI Research, believes,?This has happened because of globalisation, and overseas acquisitions made by the larger industrial houses. Most investments are in their overseas subsidiaries. Ostwal sees this trend continuing in the coming years.

Ten of the 25 houses recorded more than 50% growth in investment in the last financial over the previous year. Of these, the Tata group, Essar group, Hari Singhania group and the UB group were at the forefront. Investment growth rate numbers for Tata group companies shot up from 22% during 2007-08 to 173.3% during 2008-09.

Five houses, namely Reliance Industries led by Mukesh Ambani, Shiv Nadar?s HCL, RP Goenka, Welspun and Bajaj, recorded a decline in investment growth rates during 2008-09 from the level of 2007-08.

Amongst the biggies, the Tata group, AV Birla group and Anil Ambani-led ADAG recorded an increase of more than Rs 10,000 crore in investments in 2008-09. The actual investment figure of Tata group companies was Rs 51,543 crore during 2008-09. Among Tata group companies, the investment figure of Tata Steel increased from Rs 4,103 crore during 2007-08 to Rs 42,372 crore during 2008-09.

A steady rise in the investment-to-assets ratio in the last three years was seen at 11 houses. Here, the AV Birla group, Essar, ADAG and Mahindra groups led the list.

The investment-to-assets ratio of the AV Birla group steadily rose from 38.27% during 2006-07 to 38.96% during 2007-08 and further climbed to 44.94% during 2008-09. In constrast, a steady declining trend in the ratio was seen with HCL, BK Birla, Hinduja and Bajaj groups.