Mumbai, Jan 11 (PTI) Fresh greenfield investments arestill a long way away but capex by asset-light corporates islikely to increase 5-8 per cent over the next two years toprimarily meet working capital needs, says a report.This is because of efficiency ratio or capacityutilisation of corporates is not likely to rise from thepresent 65-70 per cent that was the levels since FY15-FY17,due to global overcapacity and transition to GST, domesticrating agency India Ratings said in a report today."We expect capex by top 200 asset-heavy corporates toincrease at a CAGR of 5-8 per cent over FY18-FY20, primarilyin the form of maintenance capex," it said.In FY17, capex rose 5 per cent while the same grew 4per cent in the previous fiscal year.Non-stressed corporates are likely to be largestcontributors to this capex drive beyond FY20, while capex bystressed corporates is likely to be muted.Contribution to the total capex by non-stressedcorporates in FY16-FY17 was 80 per cent as against 80 per centin FY11-FY12."The stressed corporates have a limited ability toundertake any meaningful capex activity over the next five-to-seven years due to weak credit metrics as indicated byinterest cover of 0.5x and net leverage of 17.8x, along withan 8 per cent decline in pre-tax profit," the report noted.The capacity utilisation levels of the top 200corporates are likely to be impacted by stagnant demand asreflected by a 9 per cent growth in nominal private finalconsumption expenditure in the first half of FY18 compared toa double-digit growth in FY17.Export demand registered a 7 per cent annualisedgrowth in April-November 2017, similar to the growth levelssaw in the same period in 2016.While non-stressed corporates achieved high capacityutilisation of 75-80 per cent in FY17, the presence ofstressed corporates with low capacity utilisation of 40-45 percent could lead to an increase in mergers/acquisition acrosssectors under the Insolvency and Bankruptcy Code over FY19-FY20, resulting in delay in any significant greenfield capex.It believes that with the proposed bankrecapitalisation, the quantum of capital injection intopublic sector banks and mobilisation of capital should largelycover the provisioning shortfall for stressed assets andaddress issues pertaining to non-performing assets.Capital injection may also support modest growth in advances but is unlikely to support any significant investment demand by corporates, it said.

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