6 States Had 67% Share In Cost Of Pvt Projects Sanctioned By Banks In FY26, Pg11

Key Highlights:

• Six states, led by Maharashtra and Gujarat, accounted for 67.1% of the total private project costs sanctioned by banks and financial institutions in FY26.
• Maharashtra emerged as the top destination, attracting projects worth Rs 88,880 crore (20.2%), surpassing Gujarat.
• The aggregate cost of projects sanctioned by banks and financial institutions increased by 19% to Rs 4.4 lakh crore in FY26 from Rs 3.7 lakh crore in FY25.
• A study by the Reserve Bank of India (RBI) indicated strengthening private-sector investment intentions and a healthy outlook for 2026-27.

Detailed Insights:

• Gujarat followed Maharashtra with Rs 78,760 crore (17.9%), while Rajasthan secured Rs 48,840 crore (11.1%) of the sanctioned projects.
• Karnataka, Andhra Pradesh, and Tamil Nadu were also significant recipients, contributing to the top six states' share.
• The combined share of Maharashtra and Gujarat in FY26 was approximately 38% of the total project cost sanctioned.
• There was a geographical shift in investment, with Maharashtra, Rajasthan, and Karnataka increasing their shares, while Gujarat, Andhra Pradesh, and Tamil Nadu saw declines.
• Banks and financial institutions financed about 55% of the aggregate project cost, amounting to roughly Rs 2.4 lakh crore.
• Beyond bank financing, private non-financial companies raised an additional Rs 1 lakh crore through External Commercial Borrowings (ECBs) and Rs 23,809 crore via Initial Public Offerings (IPOs) for capital expenditure.
• Total investment intentions across all sources for FY26 reached Rs 5.6 lakh crore across 1,839 projects, an increase from Rs 5 lakh crore and 1,581 projects in FY25.
• The post-Covid period has seen a noticeable increase in mega projects (costing Rs 5,000 crore or more) and large projects (Rs 1,000-5,000 crore).

Key Concepts Involved:

• Private-sector investment: Capital deployed by non-governmental entities for economic activities, driving growth and job creation.
• Financial Institutions (FIs): Organizations like banks, insurance companies, and investment funds that provide financial services.
• External Commercial Borrowings (ECBs): Loans raised by eligible resident entities from recognized non-resident entities.
• Initial Public Offering (IPO): The process of offering shares of a private corporation to the public in a new stock issuance.
• Capital expenditure (Capex): Funds used by a company to acquire, upgrade, and maintain physical assets such as property, plants, or equipment.