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Indian business giants, including Reliance Industries, Tata, Adani, and JSW groups, are gearing up to invest $800 billion over the next decade, according to a report by S&P Global Ratings. This massive capital outlay represents nearly three times the investment made in the previous 10 years. Approximately 40% of the planned investments will target emerging sectors such as green hydrogen, clean energy, semiconductors, and electric vehicles (EVs). However, the report cautions that these bold ventures carry significant risks, including potential debt accumulation and the uncertainties of unproven technologies.
Green Hydrogen and Clean Energy in Focus, but Execution Risks Loom
Green hydrogen stands out as a key focus area but poses substantial challenges. It requires significant upfront capital investment without guaranteed returns, making it a high-risk venture. S&P Global warns that the success of these projects depends on companies’ ability to manage execution risks while maintaining stable credit profiles. “As debt levels rise, conglomerates will need to bolster their core business operations to safeguard their financial stability,” said Neel Gopalakrishnan, credit analyst at S&P Global.
He added that five major players — Tata, Adani, Reliance, JSW, and Vedanta — alone are expected to channel $350 billion into new sectors over the coming decade.
Conservative Players to Focus on Profitability
Meanwhile, other conglomerates, including the Birla, Mahindra, Hero, ITC, Hinduja, Bajaj, and Murugappa groups, are taking a more measured approach. They are expected to focus on consolidating their existing businesses, expanding scale, and enhancing profitability, the report states.
These companies have traditionally maintained conservative growth strategies. If investment trends from the past two years persist, Indian conglomerates could collectively direct $400–$500 billion into their core businesses over the next decade.
External Funding Likely to Play a Key Role
S&P Global’s report emphasizes that many new ventures will likely require external capital. While the Tata group, with its robust cash flows and reserves, can fund expansions independently, other companies may need to rely on a mix of debt and equity financing to support their growth plans. The report estimates that around 50% of future investments could be made without raising leverage, provided earnings (EBITDA) continue to grow steadily. The remaining capital is expected to come from external sources. Some firms are also exploring innovative financial strategies to manage debt.
For example, the Tata group, which is significantly expanding Air India’s fleet, may employ sale-and-leaseback arrangements with aircraft lessors. This approach would reduce debt levels while generating funds for further investment.
Adjusting Investments Based on Technology Outcomes
While Indian conglomerates are betting on emerging technologies, they remain cautious about risks. “If certain technologies fall short of expectations, companies are prepared to adjust their investment strategies,” the report notes. Adani’s approach to green hydrogen illustrates this caution. The group has committed an initial $10 billion to the sector, with plans to reach a production target of 1 million tonnes annually by 2027, but it remains open to recalibrating based on market developments.
Indian conglomerates’ aggressive expansion into new sectors could shape the country’s economic landscape over the next decade. However, their ability to balance ambition with financial prudence will be key to sustaining growth.
