Infrastructure project awarding continued its strong growth momentum in October 2023, registering a 65% year-on-year expansion to Rs 569 billion, while tendering activity witnessed a 11% decline to Rs 1.1 trillion, as per the latest monthly update report published by leading brokerage Antique Stock Broking Ltd.
The total value of infrastructure projects awarded in October 2023 stood at Rs 569 billion, a significant 65% rise compared to project awards of Rs 344 billion in October 2022.
Looking at the April-October cumulative period this fiscal, infrastructure projects valued at a massive Rs 6 trillion have been awarded across India, clocking a 66% spike over last year.
However, when it comes to new tenders, the pace has slowed down, as is to be expected in the run up to an election.
The total worth of infrastructure project tenders issued in October declined 11% year-on-year to Rs 1.1 trillion.
For the year so far, April-October, overall infrastructure tendering activity across the country has remained flat at Rs 7.3 trillion.
According to analysis by Antique Research, the continued robust momentum in infrastructure project awarding without a matching acceleration in tender volumes poses risks of awarding growth moderating in FY2025.
Reviewing the sector-wise awarding activity in October, the coal mining sector took the lead with project awards amounting to Rs 173 billion followed by roadways which saw project awards of Rs 139 billion.
Looking at the April-October 2023 period, road projects spanning 2,595 km have been awarded, significantly lower compared to road project awards covering 5,007 km awarded during April-October last fiscal.
Coming to tendering activity, the share of state governments in issuing fresh infrastructure tenders has expanded to 85% in October 2023, rising from 79% contribution seen last year.
Among key infrastructure sectors, roads tendering declined to Rs 398 billion in October versus Rs 458 billion in the same month last year. Similarly, tenders issued in water supply sector also dropped to Rs 123 billion in October, compared to Rs 208 billion in October 2022.
On the flip side, railway tendering continued its growth trajectory in October 2023, amounting to Rs 90 billion aided by higher budgetary allocations this year, against Rs 70 billion tenders floated last year.
Overall, tendering from core infra segments continues to dominate, contributing 85% to total tendering activity in October.
According to Antique Research, even though state elections have temporarily dampened fresh infrastructure project announcements, the long-term infrastructure investment cycle in India remains structurally intact. The research team believes infrastructure tendering and awarding activity will continue to accelerate over the coming quarters, it said.