Private Corporate Capex Projected to Hit Rs 3.2 Lakh Crore in FY27, RBI Bulletin Shows

Capital expenditure by India's private corporate sector is poised to expand significantly, with envisaged capex estimated at Rs 3.2 lakh crore in financial year 2026-27 (FY27). According to an article titled Private Corporate Investment: Growth in 2025-26 and Outlook for 2026-27 published in the Reserve Bank of India's (RBI) September Bulletin, the projection reflects strong momentum in private capital deployment across diverse financing channels.

The estimated capex compares favorably with the Rs 2.6 lakh crore recorded through identical financing channels during FY26. The central bank's assessment integrates the phasing profile of ongoing pipeline projects funded via banks and financial institutions, external commercial borrowings (ECBs), and domestic initial public offerings (IPOs).

Record Sanctions Build Pipeline

The growth outlook for FY27 is underpinned by a historic surge in project sanctions during FY26. Aggregate project costs sanctioned by banks and financial institutions climbed to a record Rs 4.4 lakh crore in FY26, rising from Rs 3.7 lakh crore in FY25.

The phasing schedules of these sanctioned projects reveal extended deployment schedules:

• FY26 Outlay: Approximately 43.2 per cent of sanctioned project costs were scheduled for expenditure during FY26 itself.
• FY27 Pipeline: A notable 34.5 per cent of the aggregate cost is slated for deployment in FY27.
• Subsequent Years: The remaining 22.2 per cent will be disbursed in FY28 and beyond.

The RBI noted that the FY27 estimate of Rs 3.2 lakh crore remains an incomplete picture because it relies predominantly on projects approved up to FY26. As fresh project sanctions materialize during FY27, aggregate capital deployment for the fiscal year could see upward revisions.

Greenfield Projects and Infrastructure Lead

A critical feature of the unfolding investment cycle is the corporate sector's emphasis on fresh capacity creation rather than routine brownfield modifications. Greenfield investments constituted 89.2 per cent of the total cost of projects sanctioned by financial institutions and banks in FY26.

Sectorally, infrastructure retained its position as the primary destination for corporate investment. The sector accounted for 54.2 per cent of the total cost of sanctioned projects during FY26.

Key Drivers of Private Capex:

• Power Generation and Utilities: Power remained the single largest driver of capex intentions, capturing the bulk of infrastructure outlays.
• Roads and Bridges: Transportation corridors formed the second-largest investment pocket within infrastructure.
• Industrial Capacity: Heavy manufacturing and core sector industries accounted for the remainder of major greenfield initiatives.

Credit Expansion and Macro Backdrop

The strengthening investment pipeline is moving hand in hand with an acceleration in commercial lending. Term loans, which represented 64.1 per cent of total bank credit, recorded year-on-year growth of 15.4 per cent as of June, up from 8.3 per cent during the same period in the previous year. Furthermore, companies are leaning increasingly on diversified funding lines, including ECBs, foreign direct investment (FDI), and equity capital markets.

The capex expansion comes against an economic backdrop where India recorded GDP growth of 7.8 per cent in the first quarter of FY27. While the central bank noted that external factors—such as geopolitical conflicts and trade policy uncertainties—could temper broader risk appetite, healthy corporate balance sheets and resilient domestic demand continue to anchor business confidence across the country.

Tags: Reserve Bank of India Capital Expenditure Infrastructure Sector Power Sector Corporate Investment Indian Banking