India's Private Capex Pipeline Hits Rs 99.7 Lakh Crore as Big Projects Raise Lending Risks

A surge in investment plans puts bank lending under scrutiny

India's outstanding private investment pipeline reached Rs 99.7 lakh crore in September 2026, up 39% from a year earlier, according to Union Bank of India research based on CMIE-Capex data. Much of the increase came from information technology enabled services and conventional power, while five states captured 94% of the annual net rise.

The figures describe a sharp expansion in corporate plans to build factories, power plants, technology facilities and other assets. They also reveal a growing challenge for lenders: more money is tied to very large projects in a relatively small number of locations and industries.

The pipeline expanded by Rs 46.4 lakh crore over two years, compared with an increase of Rs 7 lakh crore in the eight years to March 2022. Its September 2026 value was nearly 4.1 times the level recorded in March 2014.

Capital expenditure, usually shortened to capex, means spending on assets intended to serve a business for years. The pipeline tracks announced projects, with spending and construction still to follow. For banks, the practical task is deciding which plans can become operating businesses that earn enough to repay loans.

Union Bank's banking research catalogue lists studies of India's capex announcement cycle by sector, ownership and state, alongside research on corporate investment trends and lending opportunities. Together, the findings point to growing demand for finance, with concentrated exposure and execution risks requiring close attention.

How quickly has the pipeline grown?

The recent increase stands out against the much slower expansion before March 2022. The Rs 46.4 lakh crore added over the latest two years was about 6.6 times the Rs 7 lakh crore added during the earlier eight years, despite covering a much shorter period.

The main reference points show how the investment cycle has changed:

• March 2014: The pipeline stood at roughly one quarter of its September 2026 value.
• Eight years to March 2022: Outstanding planned investment increased by Rs 7 lakh crore.
• Two years to September 2026: The pipeline expanded by Rs 46.4 lakh crore, with planned investment value rising 87% and project numbers rising 18%.
• September 2026: The pipeline reached Rs 99.7 lakh crore, 39% above its level a year earlier.

The bank also recorded 5,311 projects, an increase of 50% in its longer comparison, with average project size rising 2.7 times to Rs 1,878 crore. The shorter comparison is especially useful for understanding the current lending challenge: investment value has recently grown much faster than the number of projects.

Manufacturing and electricity hold most of the money

Manufacturing accounted for Rs 41.3 lakh crore of the pipeline and electricity for Rs 32.2 lakh crore. Together, their Rs 73.5 lakh crore represented about 74% of the total, making them the largest destinations for planned private investment.

Services grew fastest, rising 347% to Rs 21.9 lakh crore. An increase of 347% means the pipeline became about 4.5 times its earlier size. Power generation, IT and information technology enabled services, metals and chemicals accounted for about 80% of outstanding investment plans.

Growth was uneven within those broad industries. The pipeline for inorganic chemicals fell 39%, aluminium declined 31% and cement dropped 16%. Banks therefore face different conditions even among businesses commonly grouped together as industrial borrowers.

A lender assessing a chemicals plant or cement factory needs to examine demand for that particular product and the company's ability to sell it. The rapid expansion of the national pipeline can sit alongside shrinking investment plans in individual industries.

Technology services and conventional power drive the increase

Information technology enabled services, or ITES, expanded from Rs 2.2 lakh crore to Rs 18.9 lakh crore in one year. The increase of Rs 16.7 lakh crore left the pipeline about 8.6 times its previous size.

Just 160 ITES projects accounted for that Rs 18.9 lakh crore, giving an average project value of about Rs 11,800 crore. That is roughly six times the Rs 1,878 crore average across the entire private capex pipeline. A delay in even a few such projects could affect a substantial amount of planned lending.

Conventional power added Rs 7.6 lakh crore, with average project size of Rs 12,600 crore. ITES and conventional power together generated 87% of the annual increase in the pipeline.

For lenders, these figures place particular weight on project preparation. Large technology facilities need dependable electricity, suitable land and customers. Power plants need fuel arrangements, buyers and connections that allow electricity to reach the grid. The bank recommended securing land, power and anchor tenants, meaning major committed customers, before financing ITES projects.

Maharashtra leads a concentrated state investment map

Maharashtra held Rs 28.6 lakh crore, or 29%, of the pipeline, compared with a 9% share in March 2014. Its share therefore rose by 20 percentage points, while the value of its pipeline grew 97% in the latest year.

Maharashtra, Andhra Pradesh, Telangana, Odisha and Uttar Pradesh together accounted for Rs 26.2 lakh crore, or 94%, of the annual net increase. Rajasthan, Karnataka and Assam lost ground. Across the outstanding pipeline, the five largest states held 68%.

The concentration becomes more pronounced when states and industries are considered together. Just 21 combinations of state and industry accounted for 59% of the total. Maharashtra alone held Rs 7.5 lakh crore in ITES, Rs 7.5 lakh crore in conventional power and Rs 4.9 lakh crore in steel. Odisha's steel pipeline stood at Rs 4.7 lakh crore.

Manufacturing plans were concentrated in Maharashtra and Odisha. Electricity investment clustered in Maharashtra, Andhra Pradesh and Rajasthan, while services were led by Maharashtra, Andhra Pradesh, Telangana and Uttar Pradesh. Housing projects were mainly in Maharashtra.

A bank can lend to several different companies yet still depend heavily on the same state's infrastructure or the same industry's demand. The bank's findings make that shared exposure a central issue when deciding how much to lend.

Bigger projects make execution more demanding

The 87% rise in planned investment value over two years, against an 18% increase in project numbers, shows that the latest expansion relies heavily on larger projects. Larger construction budgets can mean more money committed before a facility starts earning revenue.

Union Bank of India's banking research team identified concentration and project size as its main lending concerns. In its assessment of the pipeline, it stated:

Concentration (both state wise and sector wise) and ticket size are the main risks,

Ticket size means the amount of money involved in an individual project or financing commitment. When that amount is large, construction delays, rising costs or weaker customer demand can affect a greater portion of a lender's funds.

The bank warned that announcements could outpace execution. Completion dates for the individual projects were not given. For companies, the immediate challenge is turning plans into funded construction; for banks, it is checking progress before committing each new portion of a loan.

Power generation is far ahead of transmission

The power figures reveal a particularly large gap between planned generation and transmission. The report put transmission projects at Rs 0.17 lakh crore, compared with Rs 32.0 lakh crore for generation, within the broader Rs 32.2 lakh crore electricity pipeline.

On those figures, planned transmission investment was about 0.5% of generation investment, or roughly one rupee for every Rs 188 allocated to generation. Transmission lines carry electricity from power plants towards the places where it is used. A generating plant needs those connections to deliver its output.

The bank flagged this imbalance as a concern for implementation. If a plant is completed before the necessary connections are ready, its ability to supply customers and earn revenue can be delayed. That timing matters to lenders expecting loan repayments to begin after construction.

Related Union Bank research placed renewable energy capacity at 288.6 gigawatts against a target of 500 gigawatts by 2030, a gap of 211.4 gigawatts. It also cited a projected requirement for 208 gigawatt hours of battery storage by 2030. Storage holds electricity for later use, helping match supply with demand as renewable generation expands.

AI, chips and defence create another financing challenge

A separate Union Bank study identified artificial intelligence, semiconductors and defence as major destinations for the next phase of investment. It estimated indicative public and private capex of Rs 5.9 lakh crore in AI, Rs 5.27 lakh crore in semiconductors and Rs 5.07 lakh crore in defence, totalling Rs 16.24 lakh crore.

Those estimates cover public as well as private investment and use a different scope from the Rs 99.7 lakh crore private project pipeline. The study pointed to lending opportunities over the next three to five years in semiconductor packaging and assembly, battery storage, battery recycling and defence component suppliers.

The financing timetable varies sharply by technology. Semiconductor projects typically have payback periods of five to eight years, while space projects may take seven to ten years. Payback is the time needed for a project's earnings to recover its initial investment.

AI equipment brings a different problem. Clusters of graphics processing units, the specialised chips used for demanding AI calculations, may need upgrades every 18 to 24 months. A lender must consider how quickly that equipment will need replacing alongside the income it can generate.

The study found identifiable routes for debt financing in ten of twelve emerging sectors. AI and space remained largely dependent on equity, meaning money invested by owners or shareholders who accept business risk rather than receive scheduled loan repayments.

How banks can match loans to project risks

Union Bank recommended limits on exposure to individual states and subsectors, alongside single borrower limits. For very large projects, it proposed consortium lending, in which several banks share the financing rather than one institution carrying the entire loan.

The bank also recommended lending at financial closure, when the financing arrangements needed for a project are secured, and releasing funds against milestones. A construction milestone might be completion of a specified stage of work. Linking payments to progress gives lenders a way to check execution before releasing more money.

The emerging sector study called for specialised lending skills in semiconductors, hydrogen, data centres and battery storage. It linked green hydrogen financing to assured purchase agreements, giving lenders a clearer view of who will buy the output and where revenue will come from.

Other proposed tools included receivables financing, equipment leasing and green loans. Receivables financing lets a supplier borrow against payments owed by customers. Leasing can give a company access to equipment without buying it outright, which may suit businesses where machinery becomes outdated quickly.

The study projected that India's electric vehicle and battery storage market could grow from $34 billion to $113 billion by 2030, about 3.3 times its starting value. That would create financing needs across manufacturing, charging, recycling and storage. Across these opportunities, lenders face the same practical test: whether customers, infrastructure, construction schedules and repayment dates fit together.

Key Points

• India's private capex pipeline reached Rs 99.7 lakh crore in September 2026, up 39% in a year.
• Manufacturing and electricity held about 74% of planned investment; services grew fastest.
• ITES and conventional power generated 87% of the annual increase.
• Maharashtra held 29% of the pipeline, and the five largest states held 68%.
• Planned investment value rose 87% over two years, while project numbers rose 18%.
• Transmission plans totalled Rs 0.17 lakh crore against Rs 32.0 lakh crore for generation.
• Union Bank recommended exposure limits, shared lending and loan payments tied to project progress.