India’s Capex Reaches Record Levels
India’s capital expenditure (Capex), or corporate investment, has reached a record high. According to an ICICI Securities report, companies like SBI, Reliance, L&T, and NTPC are set to benefit the most. This investment boom is expected to accelerate production, employment, and economic growth, while affordable funding will facilitate expansion.
Capex: India is witnessing a surge in corporate investment, termed Capex. The latest report from ICICI Securities indicates that listed companies are increasingly investing in expanding and scaling up their businesses. Between September 2025, companies are projected to invest a total of 11.7 trillion Indian rupees (approximately $140 billion USD). When factoring in government spending, the total investment reaches an unprecedented 31.6 trillion Indian rupees ($380 billion USD).
Key sectors driving this investment boom include power, energy, factory production, the metal industry, and the automotive industry. This growth signals a strengthening of India’s investment cycle and a significant increase in companies’ expansion capabilities.
Increased Investment by Small and Large Companies
Historically, large companies were the primary drivers of significant investment. For instance, previously only 135 companies invested over $100 million annually. Now, the number has risen to 169 companies, indicating that investment is now expanding across all sectors and company sizes.
Smaller and mid-sized companies are also increasing their investments, fueling expectations of improvements in production and employment. This investment boom also represents a positive sign for the country’s long-term economic development.
Companies Benefiting from the Capex Surge
The report suggests that sectors like banks, capital goods, materials, energy, and large construction are likely to experience the most significant growth in the coming period.
Key companies within these sectors include:
SBI, Axis Bank, L&T, BHEL, JSW Energy, NTPC, Reliance Industries, HPCL, Vedanta, Bharti Airtel, Ambuja Cement, Suzlon Energy, and GR Infraprojects.
These companies possess sufficient capital and relatively low debt levels, enabling them to readily pursue business expansion and initiate new projects.
Global Policies Impacting India’s Investment Cycle
Many countries globally are prioritizing domestic production and reducing reliance on external sources. This is driving increased investment in expanding production capacity. India is similarly strengthening its capabilities in sectors such as energy, defense, rare earths, road-bridge infrastructure, factory production, and digital networks.
The report notes that India’s investment is primarily focused on established and robust industries, contrasting with investments in the US and Europe, which are increasingly concentrated on AI and technology.
Consequently, India is emerging as a secure and stable investment destination. India’s investment rate reached 34% in the first six months of FY26, signifying rapid investment growth.
Low Real Interest Rates Fueling Capex Boom
The report highlights that real interest rates are currently elevated due to low inflation. If the Reserve Bank of India (RBI) continues to reduce interest rates and inflation remains stable, real interest rates will decline, making it easier and cheaper for companies to secure loans. This access to affordable funding will enable companies to invest more aggressively and accelerate expansion plans.
Abundant Funding Provides Support to Investment
According to the report, corporate profits in India have reached 5.2% of GDP, indicating b earnings and available capital. Furthermore, companies currently hold relatively low debt levels, allowing them to readily borrow additional funds to expand their operations. The banking sector is also robust, with low Non-Performing Assets (NPAs) and limited demand for loans, providing banks with sufficient capital to lend.
A b stock market also benefits investors, enabling companies to raise capital through share offerings. These factors collectively strengthen the prospects for investment and business expansion.
