Company Registrations Spike In December

December accounts for the highest number of companies getting incorporated in the second half of this fiscal. It is the second highest after May when 16,513 new companies were registered. In October, 10,725 companies were set up, and in November, 12,843 new companies were started.

Delhi accounted for the largest number of new company registrations in December at 3,909, followed by Maharashtra (2,952) and Uttar Pradesh (1,795). Tamil Nadu accounted for 1,131 new companies while Gujarat reported 826, data from the ministry of corporate affairs showed. The companies set up in December together had an authorized capital of ₹2288 crore.

Incorporation of a business indicates investment intent and a potential increase in economic activity, although a host of variables could influence the actual investments. Some businesses may be incorporated merely for ownership of assets. At the end of December, India had 1.5 million active companies. The pace of incorporation of new companies indicates investor interest is strong even as the economy is expected to grow at around 6.8% this fiscal. Investor interest is mainly in business services, followed by manufacturing and trading.

Policy makers expect India to weather the global uncertainties arising from the lagged effect of a synchronized monetary tightening by major central banks around the world. In the April-November period, India’s factory output saw a 5.5% jump from the year ago period in spite of a base effect, official data showed earlier this week. Also, private sector firms have signalled a strong performance at the end of 2022, with manufacturers and service providers recording faster expansions in output, according to S&P Global India composite purchase managers’ index. Rising from 56.7 in November to 59.4 in December, the S&P Global India Composite PMI Output Index highlighted the quickest rate of growth since January 2012, S&P had said on 4 January.

Data also showed that the government is in the process of striking off over 46,000 companies, at the end of November, for not having filed their annual returns for two consecutive years. Over 2,400 companies have secured dormant status so that they are not struck off from the official register for not being active. Data also showed that roughly a third of all directors who get registered are women.