Private capex by large enterprises seen moderating next year despite strong current momentum: Govt survey

Private capex to moderate in coming year

• Private sector capex in India expected to moderate in FY27
• Core assets lead, with 49% of investment in new creation
• 65 percent of capex financed through internal accruals

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Private sector investment pertaining to large enterprises in India is expected to moderate in the coming financial year, even as companies continue to spend strongly in the current cycle, according to a government survey released on March 23.

The forward-looking survey by the National Statistics Office (NSO) shows that while corporate capital expenditure (capex) remains robust in 2025–26, growth is likely to be muted in 2026–27, reflecting a more cautious stance among firms.

Aggregate private capex is estimated at Rs 11.44 lakh crore in FY26, but investment intentions for the following year fall to Rs 9.55 lakh crore, indicating a slowdown in expansion plans.

The survey noted that companies tend to provide conservative projections for future spending, suggesting that the eventual outturn may be higher than current intentions.

A like-to-like comparison of 3,819 enterprises suggests that investment may not contract outright but stabilise.

Capex among these firms is projected at Rs 6.114 lakh crore in FY27, almost unchanged from Rs 6.112 lakh crore in FY26 and Rs 6.001 lakh crore in FY25.

Actual capex in 2024–25 closely matched earlier plans, with a realisation ratio exceeding 96 percent, underscoring that corporate India has largely delivered on its investment commitments.

Core assets dominate investment cycle

The current capex cycle remains broad-based and focused on strengthening core operations. Nearly 49 percent of firms are investing in new asset creation, while 38 percent are allocating funds towards upgrading existing assets.

A notable feature of the cycle is the strong reliance on internal funding. More than 65 percent of capex is financed through internal accruals, pointing to healthier corporate balance sheets and limited dependence on external borrowing.

At the same time, emerging sectors are beginning to feature in investment plans. Around 7 percent of firms reported investments in green energy, while 6 percent invested in robotic equipment in the manufacturing sector. Across all sectors, about 3 percent of firms are deploying robotics, signalling gradual adoption of automation and new technologies.