Construction Tenders Surge 31% to Rs 4.5 Lakh Crore in Q2FY25, Awarding Activity Yet to Gain Momentum

In Q2FY25, the construction sector witnessed a 31% increase in tender announcements, reaching Rs 4.5 lakh crore, signaling growth despite a lag in tender awarding. Tenders valued above Rs 250 crore across various segments surged to Rs 4.546 lakh crore, up from Rs 3.479 lakh crore in Q2FY24, per India Ratings. This revival is expected to boost tendering activity in Q3FY25, rebounding from the Q1FY25 dip due to general elections.

A breakdown of tender distribution highlights that 38% of tenders are for roads, up from 32% in Q2FY24. Meanwhile, 11% target railways, 19% focus on irrigation and sewage, 10% on power, and 21% on building projects. However, awarded orders remained low, dropping by 31% to Rs 1.547 lakh crore from Rs 2.238 lakh crore in Q2FY24.

Road and power projects dominated the awarded tenders with shares of 22% and 38%, respectively, while building projects held a 17% share. “Tendering activity revived in Q2FY25, and awarding activity is anticipated to pick up in 2HFY25. However, competitive intensity remains high due to limited order book size among EPC contractors,” commented Vijay Babu, Associate Director, Corporate Ratings, at India Ratings.

The upcoming quarters are anticipated to reflect improved awarding dynamics as construction tenders gain traction, propelling growth across major infrastructure sectors.