India Set To Embrace Nuclear Energy — Read Motilal Oswal's Analysis

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Motilal Oswal Report

In the Union Budget 2025-26, the finance minister announced a new Rs 200 billion mission for the research and development of small modular reactors, with the aim of operationalizing at least five indigenous SMRs by 2033. India is significantly expanding its nuclear power capacity to 22GW by 2032 and 100GW by 2047 (versus 8GW currently operational, 15GW under development).

Nuclear energy could emerge as a long-term growth driver for Indian power utility companies:

We believe NTPC Ltd. is the bellwether play for nuclear energy, which could emerge as a new growth driver. Given the sensitive nature of nuclear energy, we believe conventional nuclear investments may continue to be done in partnership with Nuclear Power Corporation of India Ltd. (NPCIL).

About 10GW of nuclear energy projects are in the planning stage, which, at Rs 150 million/MW, would require total capex of Rs 1.5 trillion. We estimate the Maahi Banswara project, which was recently transferred from NPCIL to ASHVINI, could add ~5.8% to NTPC’s regulated equity base (estimated capex of Rs 205 billion for NTPC’s 49% stake and; 30% equity).

Private players such as Tata Power and Jindal Nuclear are likely to take the SMR route to participate in nuclear energy. This route, we believe, entails a lower investment outlay with a shorter gestation period, though technology for SMRs continues to evolve.

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