Markets are reacting positively to India's 2026 fiscal budget, with investors anticipating significant gains in public sector enterprises due to targeted capital allocations and reform-driven growth initiatives. Key state-owned firms in infrastructure and energy are expected to benefit from expanded funding.
- ₹1.8 trillion ($21.7 billion) allocated to public sector units in 2026–27, a 12.3% increase.
- Disinvestment target set at ₹75,000 crore ($9 billion) for 2026–27.
- S&P BSE PSU Index rose 3.8% on budget announcement.
- ONGC, BHEL, NTPC, IOC, and SAIL highlighted as key beneficiaries.
- Projected 14%–18% EPS growth for major PSU firms by FY27.
- Over 60% of public investment directed toward infrastructure and green energy.
Investors are turning their focus to India’s 2026 Union Budget, viewing it as a catalyst for renewed gains in state-owned enterprises. The budget unveiled a 12.3% increase in capital expenditure for public sector units, amounting to ₹1.8 trillion ($21.7 billion) over the fiscal year. This allocation is expected to accelerate infrastructure modernization and energy transition projects under the purview of firms like Oil and Natural Gas Corporation (ONGC), Bharat Heavy Electricals Limited (BHEL), and National Thermal Power Corporation (NTPC). The government's emphasis on strategic disinvestment and performance-linked incentives has further fueled investor confidence. A proposed disinvestment target of ₹75,000 crore ($9 billion) in 2026–27 signals a continued push toward fiscal discipline and operational efficiency. Companies such as Indian Oil Corporation (IOC) and Steel Authority of India Limited (SAIL) are highlighted as potential beneficiaries, with market analysts projecting a 14% to 18% rise in earnings per share by FY27 if current reforms are sustained. Stock benchmarks responded swiftly, with the S&P BSE PSU Index surging 3.8% in early trading following the budget announcement. State-run banks, including Punjab National Bank and Canara Bank, also saw their market capitalizations grow by over ₹1.2 trillion collectively, driven by improved credit growth outlook and reduced stressed assets. Analysts note that the budget’s focus on green energy projects—particularly solar and wind investments—will directly uplift firms like NTPC Green Energy and Power Grid Corporation of India. The momentum is expected to extend into the second half of the fiscal year, particularly as state governments align their spending with central capital outlays. With over 60% of the planned public investment directed toward infrastructure and clean energy, sector leaders anticipate sustained demand for construction materials, power equipment, and digital infrastructure services.