According to ValueQuest founder and chief investment officer Ravi Dharamshi, the world is experiencing a fundamental shift from the previous 35-year era of minimising physical assets. As reported by Business Standard, on a $120 trillion GDP, a 2-3% rise in capex implies $2-4 trillion of additional annual investments. This global capex cycle is driven by factors fundamentally different from previous cycles, with countries investing in manufacturing capacity, supply-chain resilience, defence, energy security, power infrastructure and technology infrastructure to rebuild strategic capacity and reduce vulnerabilities created by hyper-globalisation. The larger thesis suggests the global economic and geopolitical order is undergoing a structural shift, making this cycle much broader than conventional investment cycles.
The Maintenance, Repair and Overhaul (MRO) sector presents significant opportunities for Indian companies, particularly the Adani Group which is positioned across aerospace, defence and MRO opportunities. As reported by Business Standard, India is moving towards becoming a market with close to 2,000 aircraft, creating substantial long-term requirements for aircraft maintenance and related services. The MRO opportunity could increasingly shift to India, with companies having access to airport infrastructure and land around airports being naturally well positioned. Aerospace components alone represent a $250 billion opportunity, with several firms expected to enter public markets over the next three to five years. Adani, given its presence across airport infrastructure, is well positioned to benefit from the growth of India's MRO industry.
According to ValueQuest research, the Nifty 50 will see greater representation of new sectors over the next five to 10 years. As reported by Business Standard, there is currently no defence, semiconductor value-chain firm, energy-transition player or aerospace company in the index. Over the next five to 10 years, one or two companies are expected to emerge as leaders from each sector and eventually become part of the index. The focus will shift towards economics, efficiency and monetisation as AI models mature and technological improvement begins to plateau, moving towards the platform-building phase and eventually the application layer.
India's total market capitalisation peaked at around $5 trillion in September 2024 before correcting to roughly $4 trillion, a decline of close to 20%. According to Business Standard, while the headline index may not fully capture the opportunity, significant capital is being deployed and new businesses and profit pools are emerging. India's central government capex increased from ₹50,000 crore in 2001 to ₹6 lakh crore at peak in 2008, representing a 12-fold increase. Currently, capex has risen to around ₹12 lakh crore, having roughly doubled in three to four years since 2023-24. During the earlier cycle, India's manufacturing exports did not play a major role, with services being the primary export engine. This time, India has the potential to participate more directly through exports with greater access to Western markets.
The Iran-US war has accelerated global search for neutral locations with reliable power and skilled workforce, positioning India as a major alternative destination for data centres. As reported by Business Standard, India has all three requirements - neutral ground, reliable power and skilled workforce - driving data-centre capex into the country and supporting the broader private-sector capex cycle. India's regulatory environment is also supportive, making it an attractive destination for data centre investments. Power-grid capex is increasingly critical for supporting rising electricity demand, with AI being a significant driver of power demand while the same physical infrastructure is critical for energy transition. Renewable power, particularly solar, is intermittent and often generated far from major centres of consumption, making transformers, conductors, cables and wires essential to support rising electricity demand.
