The Capital CatchUp Debut: A New Dawn For Manufacturing

In the next five minutes, you will have a customized curated compendium of industry trends, economic indicators, and expert vision you need for informed decision-making.?

The Capital CatchUp is crafted specifically for C-Suite industry leaders like you—those who demand precise, actionable data without the noise.

The Capital CatchUp is your quarterly digest focusing on a specific sector. Our inaugural edition dives deep into manufacturing—offering you exclusive insights and stats that you can actually leverage. It contains:

• Biggest Headlines of the Quarter: The figures that matter, without the fluff.
• Competitor Analysis: See how your business peers are maneuvering in the market.
• Sector Pulse: Your latest sectoral numbers, development & trends, projects raised, business investments etc.?
• Borrower’s Spotlight: How your industry partners are financing debt
• Industry Outlook: What’s on the horizon, anticipating next!

Why should you read on? Because your time is valuable, and so is the information we provide. This is not just a newsletter; it’s your extra edge to lead the market with the right info!

Join us on this journey, and let’s elevate the industry together!

Biggest Headlines of The Manufacturing Quarter!

India’s booming manufacturing sector creates more job opportunities than ever!

Indian manufacturing sector is making waves with a 40% growth between June 2022 and June 2023, creating a whopping 2 lakh jobs. CNC operators saw an explosive 160% rise in job openings, with production supervisors and machine operators following closely at 155% and 119% respectively. Communication skills now top the list, required in 17% of jobs, as the sector modernizes and evolves. This surge is driven by increased domestic consumption, government initiatives, and a global demand spike for Indian-manufactured goods.

Union Budget 2024: A blueprint for Indias manufacturing renaissance

The Union Budget 2024 has revitalized India's manufacturing sector with a significant ?2.5 lakh crore investment in industrial infrastructure. Customs duties on lithium, copper, and cobalt have been slashed to boost domestic processing. The Phased Manufacturing Programme is expanded to healthcare, cutting duties on x-ray equipment, while electronics manufacturing sees reduced customs duties on PCBA for mobile phones. New Production Linked Incentives (PLI) for leather and textiles, coupled with ?10,000 crore in employment-linked incentives for MSMEs, promise to enhance global competitiveness and job creation.

Indias Economic Strategy: Managing Short-Term Gains And Long-Term Risks Of Chinese FDI

China's increased FDI in India offers short-term manufacturing boosts but poses long-term risks. The Global Trade Research Initiative warns that heavy Chinese investment could heighten supply chain vulnerabilities and crowd out local firms. China is already India's top import source in eight key industrial categories, raising concerns that this dependency could harm domestic industries. With Chinese firms dominating, there's a risk that local businesses might face closures, undermining India’s manufacturing ambitions. Policymakers need to balance FDI benefits with robust support for local industries to safeguard long-term economic stability.

The dust has settled on Budget 2024, Our Finance Minister Nirmala Sitharaman's speech left us with a plate full of economic pronouncements ?? But it's the numbers that truly determine the make and break of your business! Catch the latest manufacturing numbers here:?

The Manufacturing Pulse!

Insights Powered By Projects Today

The manufacturing sector has been on a remarkable journey in early 2024. The Manufacturing Index has shown a solid 4.7% rise in Q1, propelled by strong domestic and international demand. Let’s unpack the key highlights and what they mean for you.

Top Investments

The sector has seen a notable uptick in investments, with a total of $48 billion flowing in Q1 alone—up by 6% from the previous year. Here’s where the big players are putting their money:

• Tata Steel is expanding its steel production facilities with a hefty $2 billion investment.
• Reliance Industries Limited 's is diving into petrochemicals with $1.5 billion earmarked for expansion.
• Mahindra Group 's Mahindra & Mahindra is investing $1 billion in electric vehicle (EV) manufacturing plants.

Subsector Insights

• Automotive Manufacturing has zoomed ahead with a 5.5% production increase.
• Electronics Manufacturing is buzzing with a 7% boost in output due to hefty investments.
• Pharmaceuticals are growing steadily at 4.2%, thanks to ramped-up R&D efforts.

Ownership Breakdown

The sector is predominantly driven by private enterprises (70%), while public enterprises hold a 20% share and foreign entities account for 10%.

Major Tenders and Projects:

• The government has rolled out a $2 billion tender focusing on sustainable manufacturing and renewable energy.
• Companies are spreading their wings globally. Larsen & Toubro has bagged a $1.5 billion contract to set up a plant in Southeast Asia.
• Bharat Forge Ltd is investing $800 million in a joint venture in Eastern Europe.

Top Project Investments of the Quarter 2024?

In May, manufacturing took a hefty share of the spotlight with ? 61,107.64 crore across 188 new initiatives, making up 31.44% of all investments announced.

The standout project?

JSW Energy Ltd PSP Eleven’s ? 25,000 crore Electric Vehicle Complex in Odisha, aiming to produce EVs, buses, and lithium-ion batteries.

Curious about what’s shaping the manufacturing landscape right now? The latest Projex Investment Survey 95, conducted by Projects Today in July 2024, sheds light on the sector’s current state and future prospects. Here’s a snapshot of what you need to know:

The July Under Surprise

Based on Project Today’s July survey report on Private Investment Survey

Survey Overview

The survey delves into how recent economic policies are impacting the manufacturing sector. It evaluates investment sentiment and highlights key challenges that the industry is grappling with.

Investment Sentiment:

• Optimistic: A notable 65% of industry leaders are gearing up to boost their investments in the next year. The focus is on enhancing automation, adopting sustainable manufacturing practices, and expanding production capabilities. This trend signifies a drive towards greater efficiency and environmental responsibility.

• Manufacturing Sector Dynamics: For Q1 FY2025, the manufacturing sector announced 511 new projects worth ? 1,27,081.65 crore. This marks a significant 41.60% drop from Q1 FY2024, which saw 536 projects valued at ? 2,17,611.47 crore. As a result, the sector’s share in total fresh investments declined from 24.90% to 19.94%.

• Key Investment Areas: Textiles, Drugs & Pharma, Plastics, Aluminium, Cement, and Electronics are attracting substantial new investments, indicating continued interest despite the overall decline.

Noteworthy Projects:

• JSW Energy Ltd PSP Eleven made a major ? 25,000 crore investment in an Electric Vehicle campus in Baranga, Odisha, focusing on manufacturing electric vehicles, buses, and lithium-ion cell batteries.
• SANGHI INDUSTRIES LTD and Ambuja Cements Limited are set to invest ? 12,890 crore to expand cement capacities by 10 million tonnes per annum, with new plants in Gujarat and Chhattisgarh.
• Lloyds Metals & Energy Ltd is investing ? 5,852 crore in a pellet production facility in Maharashtra, while Tel Components is investing ? 6,751 crore in a mobile phone manufacturing plant in Tamil Nadu. Additionally, Kaynes Technology India Limited 's Semicon is investing ? 2,850 crore in a semiconductor facility in Telangana.

Trends in Numbers You Missed!

While overall investment in FY24 has shown a marginal increase from FY23, a granular analysis reveals distinct patterns and potential areas of concern. Here’s our analysis:

• Uneven Growth: While sub-sectors such as Machinery, Automobiles, and Electronics have attracted significant investments, reflecting a push towards technology-driven manufacturing, others like Textiles, Paints & Dyestuffs, and Pharmaceuticals have witnessed a decline.
• Shifting Priorities: The increased allocation towards Electronics and Machinery suggests a growing emphasis on technology-driven manufacturing and value addition.
• Investment Size and Nature: Analyzing the average ticket size of investments can provide insights into investor preferences. A predominance of large-scale investments might signal a focus on capital-intensive projects, while smaller investments could indicate a preference for innovation-driven ventures.
• Public-Private Investment Ratio: The proportion of public and private investment can offer clues about the government's role in shaping the sector's trajectory. A shift towards public-private partnerships could indicate a strategic focus on infrastructure development or emerging technologies.
• Global Integration: Assessing the inflow of foreign direct investment (FDI) can provide insights into the sector's global competitiveness. A rising trend in FDI suggests a favorable investment climate and integration into global supply chains.

A Spotlight on Top Borrower

KG Mills Dominates the Textile Market with INR 57+ Crore Funding

Sri Kannapiran Mills Ltd. (SKML), a flagship of the $250 million KG Mills Group, has evolved from a cotton trading house to a diversified textile conglomerate with six manufacturing facilities across South India. KG Mills nearly doubled its turnover, reaching INR 500 Cr in FY22, up from INR 252 Cr in FY21.

Key details:

• INR 57.48 Crore in total loans disbursed
• 12+ Expressions of Interest
• 3 Loan Sanction Letter
• Achieved in just 2 months

The key to their rapid success??

Strategic Debt Financing. By leveraging low-cost funding through the Yubi Credit Market, KG Mills exemplifies how effective debt financing can drive growth in today’s dynamic manufacturing land.

Here's what the textile industry trendsetter CEO of KG Mills, Srihari Balakrishnan has to say:

Discover how Yubi Credit Market can help you navigate your financing needs and unlock growth potential.

Takeaways and The Future

Despite the public sector’s investment lull due to election delays, the private sector’s rising capex in manufacturing is a bright spot. With fresh eyes on the budget and a flurry of new state investments, expect a steady increase in capital flows. Sectors like Cement, Steel, and Electronics are gearing up for a boost, while infrastructure projects are poised to get back on track.

To sustain growth, the sector needs to focus on value-added manufacturing and reduce reliance on raw material imports. Additionally, exploring niche markets and promoting exports can be strategic growth drivers. The government's role in providing infrastructure, simplifying regulations, and fostering a conducive business environment will be crucial.

From a financing perspective, access to affordable credit and innovative financial instruments will be essential for manufacturing businesses to scale up operations. The focus should be on seeking financial products tailored to the specific needs of the business sector.

As Pulkit Garg , Senior Vice President and Head of Enterprise Finance at Yubi , aptly puts it,

The recent Union Budget will provide further impetus to the 'Make in India' initiative. With emphasis on empowering youth, skilling, manufacturing, and an allocation of over 2.5 lakh crore towards infrastructure development, the announcements made reflect India's potential and promise. By strategically coupling these areas with a robust credit ecosystem, we can catalyse investments, foster innovation and fuel a more sustainable business landscape

So, buckle up for upcoming gains and reforms! The political season may have hit the brakes, but the private sector is ready to hit the gas. Get ready for a year where innovation meets opportunity—because if the government’s taking its sweet time, the private sector’s clearly on a caffeine high!

That's a wrap, folks! This has been a whirlwind tour of India's manufacturing landscape, filled with big numbers, bigger dreams, and even bigger opportunities. Please stay tuned for our next edition, packed with even more exclusive intel, data-driven analysis, and industry whispers. Subscribe now, and let's continue this exciting journey together! And hey, while you're at it, please give Yubi Credit Market a follow for updated hits on anything credit and finance.