India’s corporate GVA grew at 8% in last three years: Motilal Oswal

India’s corporate gross value added has increased at an average of 8 per cent during the past three years between FY20 and FY22(provisional), slower than 11 per cent growth in the pre-COVID period between FY16-FY19, Motilal Oswal said in its report on Wednesday. 
 

According to the report by brokerage, the decline in the growth of GVA in the post pandemic period is primarily driven by the weak GVA growth of the unlisted corporate sector, as listed companies have grown at a much faster pace.
The listed companies contribute only about 30 per cent of aggregate corporate GVA.  “Their share was similar in FY13 and FY14, which fell to its trough of 24 per cent in FY20, before picking up. As a corollary, it also means that the unlisted corporate sector is more than two times the size of the listed sector in terms of GVA,” the brokerage said. 

The corporate sector accounts for almost 45 per cent of India’s nominal GVA, of which non-financial companies (NFCs) contribute about 40 per cent and financial companies make up for the remaining 5 per cent. This share has remained broadly stable during the past decade. On the other hand, the household sector, including the MSMEs, accounts for another 45 per cent of GVA. 
Of the total share of 30 per cent of the listed corporate sector, Nifty50 companies account for almost half at 15 per cent in FY22, up from 13 per cent in FY19-FY20. “This was their highest share since FY12 (since when the data is available) and compares with 12.5-13 per cent in the pre-COVID period,” the report stated. 
 

As per the brokerage report, the GVA of listed NFCs using their data on employee salaries, interest payments, depreciation expenses, and profit before taxes (PBT) stood at Rs 26 trillion in FY22, or 12 per cent of the national GVA, which increased to Rs 28 trillion or 11.3 per cent of GVA in FY23.

Interestingly, almost the entire improvement in growth in the listed sector’s GVA in the post-COVID period is led by non-BSE 500 companies. 
While the GVA growth of Nifty50 and non-Nifty BSE500 companies was slower in the pre- and post-COVID period, it improved to 13 per cent per annum for the non-BSE 500 listed companies compared to just 1 per cent in the pre-COVID period, as per the report.