Summary:
Private sector capital expenditure in India is improving, led by power generation, renewable energy and digital infrastructure. RBI data show FY26 investment intentions rising to ₹5.6 lakh crore, while new project announcements indicate continued momentum in H1FY27.
Private sector capital expenditure in India is showing signs of improvement, led by investment in power generation, digital infrastructure, manufacturing and logistics. New project announcements and higher spending commitments indicate that companies are gradually expanding capacity, although investment remains concentrated in a few capital-intensive industries.
Data released by the Reserve Bank of India (RBI) show that private corporate investment intentions increased during FY26, while additional project announcements continued in H1FY27.
Private Investment Intentions Increase in FY26
During FY26, banks and financial institutions sanctioned loans for 1,032 private sector projects with an aggregate project cost of approximately ₹4.4 lakh crore.
This compared with 907 projects worth ₹3.7 lakh crore in FY25.
When projects financed through other channels are included, total investment intentions increased to approximately ₹5.6 lakh crore across 1,839 projects.
In FY25, investment intentions stood at around ₹5 lakh crore across 1,581 projects.
| Indicator | FY26 | FY25 |
| Projects financed by banks & FIs | 1,032 | 907 |
| Cost of financed projects | ₹4.4 lakh crore | ₹3.7 lakh crore |
| Total investment intentions | ₹5.6 lakh crore | ~₹5 lakh crore |
| Total projects announced | 1,839 | 1,581 |
The increase indicates improving willingness among private companies to undertake capacity expansion and infrastructure development.
However, investment announcements represent planned spending rather than completed investments.
Power and Digital Infrastructure Attract Investment
Power generation remains among the largest areas of private capital investment.
Rising electricity demand from industries, households, commercial establishments and digital infrastructure is supporting investment in generation and transmission facilities.
Renewable energy is another important contributor.
Companies are expanding solar, wind and energy storage capacity to meet long-term electricity requirements.
Digital infrastructure is also attracting investment through data centres, telecom networks and associated power and cooling systems.
These projects require substantial upfront spending on equipment, land, construction and technology.
Demand for industrial machinery, electrical equipment and engineering services can increase as these investments move from announcements to execution.
Manufacturing Investment Remains Uneven
The investment recovery is not uniform across industries.
Power, infrastructure and selected industrial segments are attracting large projects, while several consumer-facing manufacturing businesses continue to expand capacity at a slower pace.
This difference reflects varying demand conditions and existing production capacity.
Companies with sufficient unused capacity may prefer increasing utilisation rather than constructing new factories.
Businesses facing weak demand or uncertain export markets may also delay investment decisions.
Gross fixed capital formation, an important measure of investment activity in the economy, increased 11.9% YoY at constant prices during April-June 2026.
The growth suggests that overall capital formation is improving, although the distribution of investment remains uneven.
What Does Higher Capex Mean for Listed Companies?
Higher capital expenditure can create demand across several industries.
Power equipment manufacturers may benefit from orders for transformers, cables, generators and other electrical systems.
Construction and engineering companies can receive orders for industrial plants, roads, transmission networks and other infrastructure projects.
Capital goods companies may also see higher demand for machinery and automation equipment.
Banks and financial institutions can benefit from financing requirements as companies borrow to fund new projects.
However, order announcements do not immediately translate into revenue. Project execution, delivery schedules, margins and payment cycles determine financial performance.
Outlook for FY27
The value of new investment projects announced during H1FY27 increased approximately 35% YoY to ₹31 lakh crore.
Separately, the RBI's assessment of planned spending from existing project pipelines indicates envisaged private corporate capex of approximately ₹3.2 lakh crore during FY27. The two figures measure different aspects of investment activity and should not be compared directly.
The next stage of India's private investment cycle will depend on whether announced projects translate into actual spending.
For now, power and infrastructure continue to lead private capex, while broader manufacturing participation remains essential for a more balanced expansion.
