L&T, NBCC, Ashoka Buildcon: Infrastructure shares rise as capex target raised to ₹12.2 lakh crore in Union Budget FY27

Infrastructure firm shares were trading higher on Sunday, February 1, as Finance Minister Nirmala Sitharaman said the target for capex will be raised to ₹12.2 lakh crore for FY27 from ₹11.2 lakh crore earmarked for the current fiscal year and announced a slew of measures to boost infrastructure in the country.

Shares of L&T (1.03%), NCC (2.64%), IRB Infrastructure (1.81%), PNC Infratech (5.59%), Ashoka Buildcon (3.05%), NBCC India (1.08%) and Power Grid (1.25%) rallied following the announcement.

Presenting the Union Budget for 2026-27 in the Lok Sabha, Sitharaman said the government will continue to develop infrastructure in Tier-2 and Tier-3 cities.

The government also proposes to set up a risk guarantee fund for the infrastructure sector, she added.

A scheme for enhancement for construction and infrastructure equipment will be introduced to strengthen domestic manufacturing, Sitharaman said.

The government also proposes to support professional institutions like ICAI and ICSI to design short-term modular courses, she added.

“Investing in infrastructure beyond metros reflects a spatial rebalancing of growth toward Tier-2, Tier-3 cities and high-footfall temple towns. Such spending can ease urban congestion while unlocking local tourism, services, and construction-led employment. The economic payoff will depend on integrating these projects with transport links, urban governance, and private investment,” said Manmeet Kaur, Partner at Karanjawala & Co.

The Economic Survey released earlier this week highlighted that the government’s capital expenditure has increased nearly 4.2 times, from ₹2.63 lakh crore in FY18 to ₹11.21 lakh crore in FY26 (BE), while effective capital expenditure in FY26 (BE) is ₹15.48 lakh crore, positioning infrastructure as a key growth driver.

The survey added that the national highway (NH) infrastructure has also expanded substantially during recent years. The NH network grew about 60% from 91,287 km (FY14) to 146,572 km (FY26, up to December), while operational high-speed corridors increased nearly 10-fold—from 550 km (FY14) to 5,364 km (FY26, up to December).

Railway infrastructure has also expanded, with the rail network reaching 69,439 route km as of March 2025, and 99.1% electrification being achieved by October 2025.

In Budget 2025, the Finance Minister allocated a record of ₹11.21 lakh crore for the infrastructure sector compared with the previous year’s ₹11.11 lakh crore.