Glossarytaught in M2.04, M3.07
Growth capital expenditure
Also called growth capex, expansion capex.
Capital spending that adds capacity or enters new markets, as opposed to replacing what wears out.
When ₹300 crore of a ₹460 crore capital budget is maintenance, the company is committing ₹160 crore to growth.
Separating them changes how a business is valued. Growth spending is discretionary and should be judged by the return it earns. Maintenance spending isn't optional and is properly treated as a cost.
Suspend growth spending and a company has more cash and less future. A valuation should show that trade openly.