Steel PSU capex to rise 44% in FY27

Capital expenditure (capex) by steel public sector undertakings will annually rise by nearly 44% in fiscal 2026-27 to Rs 25,125 crore, budget documents show. Steel Authority of India Limited (SAIL), and National Mineral Development Corporation (NMDC) lead the pack with a 50% rise in capex funded through Internal and Extra Budgetary Resources (IEBR).

SAIL is expected to spend Rs 15,000 crore in FY27, up from Rs 10,000 crore capex in FY26. NMDC’s capex will rise from Rs 6,000 crore in FY26 to Rs 9,000 crore in FY27. Manganese Ore India Limited (MOIL) will spend Rs 800 crore in the coming fiscal, up from Rs 600 crore in the current.

At 205 million tonnes per annum (mtpa), India is the second largest producer of crude steel after China (well over 1200 mtpa). Under the National Steel Policy (NSP) 2017, India aims to achieve 300 mtpa capacity by 2030-31. According to industry estimates, the fresh upcoming capacity addition plans of 80-85 mt, require investments of $ 45-50 billion by 2023-31.


This higher capex is in anticipation of improved prospects for India's domestic steel industry. Analysts project the sector is underpinned by improving domestic price momentum despite global headwinds.

“We believe the recent weakness in consumption is more seasonal than structural," Nomura said in a research note issued last week noting the growth momentum will pick up in FY27–28F, driven by recovery in autos, infrastructure expansion, manufacturing growth, and resilient end-user industries.

A transition to low emission green steel is also underway. ICRA ratings estimates the share of green steel in India’s overall steel demand is expected to rise from roughly 2% (around 4 mt) in FY2030, to nearly 10% around 30 mt) by FY2040 and further to 40% (approximately 150 mt) by FY2050.