Bank-Funded FY26 Projects Rise to ₹4.4 Lakh Crore, Infrastructure Leads

India’s private investment cycle showed fresh signs of strength in FY26, with banks and financial institutions sanctioning financing for 1,032 projects carrying an aggregate project cost of about ₹4.4 lakh crore, according to data published in the Reserve Bank of India’s September Bulletin.

The value of projects rose from around ₹3.7 lakh crore in FY25, while the number of projects increased from 907 a year earlier. The figures point to continued corporate appetite for capacity expansion despite an uncertain global environment marked by geopolitical risks, volatile financial markets and trade-related concerns.

Infrastructure remained at the centre of the investment push, accounting for 54.2% of the total cost of projects sanctioned by banks and financial institutions during FY26. Within infrastructure, the power sector was the largest contributor, followed by roads and bridges.

A particularly significant feature of the investment pipeline was the dominance of new projects. Greenfield investments accounted for 89.2% of the total project cost reported by banks and financial institutions, indicating that companies are investing not merely in maintaining existing assets but also in creating fresh production and infrastructure capacity.

The scale of individual projects is also increasing. During FY26, banks and financial institutions sanctioned 12 mega projects and 100 large projects. Large projects represented 51.3% of overall project costs, while mega projects accounted for another 17%, highlighting a gradual shift towards bigger investment commitments in the post-pandemic period.

Banks and other financial institutions financed roughly 55% of the ₹4.4 lakh crore aggregate project cost, implying funding of around ₹2.4 lakh crore. Companies also continued to use alternative sources of capital, including external commercial borrowings, initial public offerings, foreign investment and private placements.

The broader investment picture was even larger when projects funded through other channels were included. Overall investment intentions covering 1,839 projects were estimated at about ₹5.6 lakh crore in FY26, compared with ₹5 lakh crore across 1,581 projects in the previous year.

External commercial borrowings emerged as an important source of funding. According to the RBI Bulletin data, 509 private non-financial companies raised around ₹1 lakh crore through ECBs during FY26, while 298 companies mobilised ₹23,809 crore through initial public offerings.

The geographical distribution of projects also showed some changes. Maharashtra, Rajasthan and Karnataka increased their shares compared with the previous year, while Gujarat remained one of the largest destinations for investment despite its share declining from FY25 levels. Maharashtra and Gujarat together accounted for roughly 38% of the value of projects sanctioned during FY26.

The investment momentum is expected to extend into the current financial year. Based on projects already sanctioned in previous years, private-sector capital expenditure is projected at around ₹3.2 lakh crore in FY27, compared with ₹2.6 lakh crore in FY26. However, the RBI analysis cautions that complete information on projects to be sanctioned during FY27 is not yet available, meaning actual capital formation will depend on project execution as well as domestic and global economic conditions.

The numbers nevertheless suggest that India’s private investment cycle is broadening. Infrastructure remains the principal engine, but investments in sectors such as chemicals, metals, cement and food products are also contributing. Together, these sectors accounted for around 17.5% of the cost of projects sanctioned during FY26.

For policymakers and businesses, the importance of the RBI data lies not only in the rise from ₹3.7 lakh crore to ₹4.4 lakh crore, but also in the composition of investment. The high proportion of greenfield projects, growing number of large projects and continuing dominance of infrastructure suggest that companies are committing capital to longer-term capacity creation.

If these sanctioned investments move into implementation on schedule, they could generate substantial opportunities for engineering and construction companies, power-equipment manufacturers, project consultants, logistics providers, technology suppliers and financial institutions across India.

The next phase will therefore depend on how quickly these investment intentions translate into physical projects on the ground.