While private corporate investment fell in FY25, the RBI projects a meaningful rebound in FY26, with capex rising to Rs. 2.67 lakh crore on the back of greenfield projects, infrastructure push, and improved macro fundamentals
NEW DELHI (India CSR): Private corporate investment in India dropped by 5.8% to Rs. 3.68 lakh crore in 2024-25, compared to Rs. 3.91 lakh crore in 2023-24, the RBI Bulletin (August 2025) revealed. The decline underscores weak investment sentiment among corporates, even as the economy registered a robust 6.5% GDP growth, making India the world’s fastest-growing major economy.
Tepid Investment Momentum in FY25
According to the RBI’s analysis, 907 projects were sanctioned by banks and financial institutions (FIs) in FY25 with a total project cost of Rs. 3,67,973 crore. This was lower than the 944 projects worth Rs. 3,91,003 crore sanctioned in FY24.
Including funds raised through External Commercial Borrowings (ECBs) and equity issuances, overall investment intentions amounted to Rs. 4.97 lakh crore in FY25, as against Rs. 5.47 lakh crore in FY24. The decline highlights cautious optimism among corporates amid uncertain demand conditions and a preference for holding higher cash buffers.
Greenfield Projects Drive Growth
The RBI noted that 92 per cent of the sanctioned projects were greenfield (new) projects, signaling potential capacity expansion in the coming years. Expansion and modernization projects formed only 7.8 per cent of the total, continuing the trend of fresh capital creation.
The infrastructure sector dominated corporate investment, accounting for 50.6 per cent of project costs, led by the power sector and roads & bridges. However, RBI observed that this was the lowest share of infrastructure in total projects in the last decade, suggesting a relative decline in infrastructure-led expansion.
Regional Investment Leaders
State-wise, Gujarat, Maharashtra, Andhra Pradesh, Rajasthan, and Uttar Pradesh together captured about 60 per cent of total project costs in FY25. Gujarat and Maharashtra registered significant gains compared to the previous year, reflecting their stronger industrial ecosystem and investor-friendly policies.
Phased Capex Outlook for FY26
A critical highlight of the RBI study is the phasing profile of capital expenditure. Of the projects sanctioned in FY25:
- 39.3% (₹1.45 lakh crore) was planned for investment by end-FY25.
- 35.2% (₹1.30 lakh crore) is scheduled for FY26.
- 25.4% (₹93,600 crore) is envisaged beyond FY26.
In addition, funding raised through ECBs supported planned capex of Rs. 1,00,747 crore in FY25, while IPO-related capex jumped to Rs. 18,943 crore, though still a small share of overall financing.
Overall, based on all funding sources, private corporate capital expenditure is expected to rise from Rs. 2.20 lakh crore in FY25 to Rs. 2.67 lakh crore in FY26, reflecting a rebound in investment momentum.
Cautiously Optimistic Outlook
The RBI said that Indian corporates enter FY26 with healthier balance sheets, stronger profitability, improved asset quality in banks, and easier liquidity conditions, aided by a 100-basis-point policy rate cut starting February 2025.
“Despite global uncertainties, the composition of investments—driven largely by greenfield infrastructure projects—signals not only cyclical recovery but also structural capacity building,” the RBI noted.
The central bank, however, cautioned that factors such as geopolitical tensions, global demand slowdown, and external shocks may weigh on corporate sentiment. Sustained policy support, along with close monitoring of project execution, will be critical to ensuring durable growth.
📊 Key Facts: Private Corporate Investment (RBI Bulletin, Aug 2025)
| Category | FY23-24 (₹ Crore) | FY24-25 (₹ Crore) | FY25-26 (Projected, ₹ Crore) | Growth / Change |
|---|---|---|---|---|
| Projects Sanctioned by Banks/FIs | 944 Projects (₹3,91,003) | 907 Projects (₹3,67,973) | – | ↓ 6.0% in value |
| Overall Investment Intentions | 1,500 Projects (₹5,47,734) | 1,584 Projects (₹4,97,235) | – | ↓ 9.2% |
| Capex via All Funding Channels | ₹2,20,132 | ₹2,20,132 | ₹2,67,432 | ↑ 21.5% |
| Greenfield Projects Share | 89.1% | 91.6% | – | ↑ 2.5 pp |
| Expansion & Modernisation Share | 8.7% | 7.8% | – | ↓ 0.9 pp |
| Infrastructure Share | 55.5% | 50.6% | – | Lowest in 10 years |
| Top 5 States’ Share | ~55% | ~60% | – | ↑ 5 pp |
| Planned Investment FY25 | – | ₹1,44,782 (39.3%) | – | Immediate spending |
| Planned Investment FY26 | – | ₹1,29,591 (35.2%) | – | Deferred spending |
| Planned Beyond FY26 | – | ₹93,600 (25.4%) | – | Long-term pipeline |
📌 Insight: While FY25 saw a dip in project sanctions and intentions, the outlook for FY26 shows strong growth (↑21.5%) in capex, led by greenfield projects and a stronger role for states like Gujarat and Maharashtra.
📊 10 Interesting Facts: Private Corporate Investment (RBI Bulletin, Aug 2025)
| Fact No. | Key Insight | Details (FY25 / Outlook FY26) |
|---|---|---|
| 1 | Mega Projects Contribution | 10 mega projects (₹5,000+ cr) + 75 large projects (₹1,000–₹5,000 cr) made up 63% of total costs. |
| 2 | Infrastructure Share Lowest in Decade | Infrastructure accounted for 50.6%, down from 55.5% in FY24 – lowest in 10 years. |
| 3 | Power Sector Leads | Power alone contributed nearly 40% of total project costs. |
| 4 | External Borrowings | 448 companies raised ₹96,966 crore via ECBs for capex needs. |
| 5 | Equity Financing Growth | 229 companies raised ₹32,295 crore via IPOs; IPO-led capex up to ₹18,943 crore. |
| 6 | Top 5 States’ Dominance | Gujarat, Maharashtra, Andhra Pradesh, Rajasthan & UP together attracted ~60% of total project costs. |
| 7 | Regional Winners | Gujarat & Maharashtra increased their share; Karnataka’s share declined compared to FY24. |
| 8 | Capex Phasing | 39.3% (₹1.45 lakh cr) spent in FY25; 35.2% (₹1.30 lakh cr) scheduled for FY26; 25.4% (₹93,600 cr) beyond. |
| 9 | Cautious Optimism | Firms hold higher cash buffers and adopt conservative investment sentiment amid global uncertainty. |
| 10 | Macro Push Factors | RBI cites 100-bps rate cut (Feb 2025), improved balance sheets, and infra push to drive 21.5% capex growth in FY26. |
(India CSR)
