India Inc has been investing in the creation of assets, which include plant and machinery and other fixed assets. This is contrary to popular perception.

Fixed assets of 845 listed companies climbed 44 per cent to Rs 135,628 crore in the last five years, which they financed from internal accruals.

Though a part of Corporate India's cash flow was used to retire costly debt, the major part was used to build fixed assets.

A Business Standard Research Bureau study, based on data compiled by the Centre for Monitoring Indian Economy, shows that the fixed assets of 845 publicly listed companies increased from Rs 307,654 crore in 1998-99 to Rs 443,582 crore in 2002-03.

Top spenders in asset creation Top 10 companies' investments in last 5 years
(Rs crore)	Cash flow	Increase in fixed assets
Reliance Ind	20,600.63	10,226.13
BPCL	5,471.13	5,920.79
HPCL	5,509.35	5,590.74
MTNL	8,579.93	5,390.49
GAIL	6,588.80	4,173.34
IPCL	2,231.95	4,102.03
Tata Steel	3,836.40	3,888.77
Neyveli Lignite	4,470.28	3,544.04
Nalco	2,663.90	3,340.92
ITC	4,381.93	2,289.11

These companies invested Rs 106,808 crore in plant and machinery and Rs 28,820 crore in other fixed assets, the data showed.

Companies built assets and funded them largely through internal accruals. They generated a cash flow of Rs 161,066 crore in the last five years. Of this, Rs 90,176 crore came from depreciation provisions and Rs 70,890 crore from retained profits.

With no fresh capacity addition on hand, these companies used a major portion of the cash in their books for debottling existing capacities and raising capacities.

Their investment in fixed assets was almost equally spread over the last five years. The investment in plant and machinery was Rs 30,446 crore in 1998-99, Rs 29,581 crore in 1999-2000, Rs 25,872 crore in 2000-01, Rs 23,678 crore in 2001-02 and Rs 26,050 crore in 2002-03.

Such investments were aided by a steady rise in the cash flow of these firms year after year, largely due to cost cutting. Their cash flow increased from Rs 25,279 crore in 1998-99 to Rs 28,093 crore in 1999-2000, Rs 33,914 crore in 2000-01 and Rs 32,147 crore in 2001-02. In 2002-03, the cash flow increased to Rs 41,632 crore.

The top 10 companies accounted for almost a third of the investment in fixed assets. Reliance Industries, for instance, invested Rs 10,226 crore, having built a cash flow of Rs 20,600 crore in the last five years.

It increased production capacities for petrochemicals such as purified terepthalic acid (PTA) from 975,000 tonnes per annum in 1998-99 to 1.28 million tonnes per annum in 2002-03. It also expanded production capacities for linear alkyl benezene, benzene and other petrochemical products.

State-owned Bharat Petroleum Corporation Ltd, Hindustan Petroleum Corporation Ltd and Mahanagar Telephone Nigam Ltd invested over Rs 5,000 crore each in fixed assets.

Gail India Ltd and Indian Petrochemicals Ltd invested Rs 4,100 crore each in plant and machinery, while Tata Steel put Rs 3,890 crore in fixed assets. Tata Steel upgraded and rebuilt its blast furnace, installed a ladle furnace and set up balancing facilities to increase crude steel capacity.