Six states led by Maharashtra and Gujarat accounted for 67.1% of the total project cost sanctioned by banks and financial institutions in 2025-26, as private-sector investment intentions strengthened, according to a Reserve Bank of India study.Maharashtra overtook Gujarat to emerge as the largest destination for projects sanctioned by banks and financial institutions, accounting for projects worth about Rs 88,880 crore, or 20.2% of the total Rs 4.4 lakh crore sanctioned during FY26. Gujarat followed with Rs 78,760 crore (17.9%), while Rajasthan accounted for Rs 48,840 crore (11.1%).The increase in project sanctions came against the backdrop of a strengthening investment cycle. The aggregate cost of projects sanctioned by select banks and financial institutions rose to Rs 4.4 lakh crore in 2025-26 from Rs 3.7 lakh crore in 2024-25, an increase of nearly 19%.The RBI study, authored by Purnendu Kumar, Snigdha Yogindran, Sukti Khandekar and Bhavyashree K, said the increase reflected sustained investment intentions in the private corporate sector. The study also said the investment outlook was expected to remain healthy in 2026-27.Karnataka accounted for Rs 34,760 crore, or 7.9%, while Andhra Pradesh and Tamil Nadu accounted for Rs 25,520 crore (5.8%) and Rs 18,920 crore (4.3%), respectively. Together, the six states accounted for about Rs 2.96 lakh crore, or 67.1%, of the total project cost sanctioned by select banks and financial institutions in FY26. Northern states like UP, Bihar and MP are way down in attracting projects.In 2024-25, Gujarat had the largest share of project investment sanctioned by banks and financial institutions, at 20.6%, or about Rs 76,220 crore of the total Rs 3.7 lakh crore. Maharashtra followed with a 14.6% share, or Rs 54,020 crore.Maharashtra and Gujarat together accounted for about 38% of the total project cost sanctioned in FY26.Story continues below this adThe state-wise distribution points to a shift in the geography of investment. The shares of Maharashtra, Rajasthan and Karnataka increased from the previous year, while Gujarat’s share declined from 20.6% in 2024-25 to 17.9% in 2025-26. Andhra Pradesh and Tamil Nadu also recorded lower shares than in the previous year.Banks and financial institutions sanctioned 1,032 projects in FY26, compared with 907 projects a year earlier. Banks and FIs financed about 55% of the aggregate project cost, implying financing of roughly Rs 2.4 lakh crore against the sanctioned projects, , according to the report published in the RBI Monthly Bulletin.The investment picture becomes broader when sources of funding outside the banking system are included.During FY26, 509 private non-financial companies raised about Rs 1 lakh crore through external commercial borrowings (ECBs) for capital expenditure. Another 298 companies raised Rs 23,809 crore through domestic equity issuances under the IPO route to fund capital expenditure. These companies were not part of the project-financing data reported by the select banks and financial institutions covered in the RBI survey.Story continues below this adTaken together, investment intentions were recorded for 1,839 projects involving Rs 5.6 lakh crore in FY26, compared with 1,581 projects involving Rs 5 lakh crore in FY25. This represents an increase of about 16% in the number of projects and 12% in the value of investment intentions.Larger projects gain groundThe RBI analysis also points to a gradual change in the size composition of investment projects in the post-Covid period. Projects costing less than Rs 100 crore continued to account for the overwhelming majority of projects by number. However, larger projects accounted for a disproportionate share of the aggregate investment.The number of mega projects, defined as projects costing Rs 5,000 crore or more, remained relatively small during the pre-Covid period but increased noticeably after the pandemic. Their contribution to overall project costs has also remained higher in the post-Covid period than before Covid.A similar trend is visible among projects costing between Rs 1,000 crore and Rs 5,000 crore. Their number generally ranged between 20 and 42 during the pre-Covid years. In the post-Covid period, however, the number increased substantially, averaging around 80 projects, according to the RBI.Story continues below this adThe data suggests that while smaller projects continue to dominate by number, a relatively small number of large and mega projects are driving a substantial share of total investment.The RBI data thus points to higher investment intentions, greater participation by non-bank sources of capital and a gradual increase in project size. The concentration of sanctioned project costs in six states also highlights their continuing importance as destinations for corporate investment.With the RBI expecting the investment outlook to remain healthy in 2026-27, the trajectory of large projects — particularly those backed by bank financing, ECBs and equity markets — will be an important indicator of whether the private-sector investment cycle gathers further momentum.