New Delhi, March 16 -- Indian companies kept a tight grip on capital expenditure despite growing cash reserves, instead prioritising returns from financial instruments such as equity and debt securities. However, the tide has turned, with equity markets seeing sharp corrections the past few months. Will companies be forced to change their investment strategies?

Since the Covid lows, the market's upward trajectory seemed unstoppable, a siren song luring firms away from the steady anchor of capital expenditure.

Data from the Centre for Monitoring Indian Economy (CMIE) covering more than 3,000 non-financial listed firms indicates that net fixed assets, a proxy for capex, slowed to 4.7% year-on-year by the end of the first half of 2024-25 (...