India’s private capital expenditure (capex) pipeline has seen a remarkable fourfold increase since 2014, reaching nearly Rs 99.7 lakh crore by September 2026.
This significant growth, a 39% jump year-on-year, signals robust industrial activity and future economic expansion. However, a recent report by Union Bank of India highlights growing concerns for lenders.
The report points out that while the total investment value has surged, the number of projects has only increased by 50%. This means projects are getting much larger, with the average size now at Rs 1,878 crore, 2.7 times what it was before. This trend, coupled with a concentration of investments in just a few states like Maharashtra (29% of the pipeline) and specific sectors like manufacturing and electricity, could pose significant risks.
Manufacturing and electricity together account for 74% of the pipeline, with ITES and conventional power driving a major portion of the annual increase. This sectoral and geographical concentration, along with potential delays in project execution, raises questions about the overall health and distribution of this investment boom. Lenders need to carefully assess these factors to manage potential risks effectively, ensuring that the growth is sustainable and widely distributed across the economy.