Private sector capex in a sweet spot with electricity and infra being the big drivers

Roads and water supply are leading the tendering activity in India. In the roads segment, tenders over Rs 33,500 crore were floated, accounting for 31 percent of the total tender floated during the month. Among the big projects out for bidding, a two to four lane upgrade single Engineering, Procurement and Construction (EPC) project in Bihar makes for Rs 3,100 crore in size, followed by Rs 2,000 crore road tunnel project in Delhi.

The water supply segment continues to see strong action with about Rs 33,000 crore of tenders in May. The Uttar Pradesh and Rajasthan elections have a primary role to play here. The prominent project in this segment includes Rs 2,200 crore water works from Rajasthan. Furthermore, a report by Antique broking states that railways contributed Rs 22,200 crore, of which key tenders includes Rs 5,700 crore for the Hyderabad airport metro.

The total awarding rose nearly 30 percent year on year to Rs 1.26 lakh crore, which includes 360 contracts aggregating to Rs 79,200 crore. Contracts awarding in May was dominated by sectors like telecom services which saw the finalisation of five contracts totaling 19,300 crore or one-fourth of the total value awarded during the month. Other sectors like roadways, railways and wagon equipment includes contracts such as Megha Engineering order win of Rs 14,400 crore from MMRDA for civil construction work of Thane-Borivali twin tunnel project. BHEL in joint venture with Titagarh Wagons bagged 80 trainsets order.

While the awarding is gaining pace, its progress work on ground needs to be carefully observed as implementation is key. Siemens, Larsen and Toubro are large beneficiaries of the government's rising thrust on capital expenditure in the country.