India’s private nuclear power push faces years-long wait for investor returns
India’s draft rules opening civil nuclear generation to private companies mark a major policy shift, but analysts warn that regulatory hurdles and stretched valuations make immediate investment premature.
India is advancing plans to open its civil nuclear power sector to private companies, with major utilities already identifying potential project sites. The draft Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (SHANTI) Rules, 2026, are currently open for public consultation until September 4.
NTPC Ltd has pinpointed over 30 locations across multiple states and initiated preliminary studies at 10 sites. Adani Power is evaluating locations in Madhya Pradesh, while Tata Power has shortlisted areas in Madhya Pradesh, Odisha, and Gujarat.
The underlying SHANTI Act, which received presidential assent on December 20, 2025, aims to consolidate nuclear development under a single regulatory framework. Rupesh Sankhe, senior vice president of Power Utilities and Capital Goods at Elara Capital, described the draft rules as a watershed moment that introduces a composite licence for building, owning, and operating nuclear facilities.
This framework permits access to approved domestic and international technologies while expanding nuclear applications into captive power, industrial heat, and hydrogen production. However, private operators must still navigate strict financial, technical, safety, and liability mandates, including compulsory insurance and waste management protocols.
Long road to revenue
Despite this regulatory progress, market professionals caution that earnings from these initiatives remain distant. Sudhanshu Bansal, a power research analyst at JM Financial Institutional Securities, estimates it will take six to eight months to finalize the rules, followed by another 10 to 12 months to release detailed standard operating procedures.
“It's easier said than done,” Bansal remarked, pointing to substantial execution headwinds regarding fuel availability, liability structures, technology adoption, and talent acquisition. Consequently, he advises against purchasing power stocks based solely on the current SHANTI narrative.
Stretched valuations
Current market pricing already reflects strong visibility on power demand and robust capital expenditure pipelines. Adani Power currently trades at 31.05 times earnings, significantly above its five-year average of 14.04 times, while Larsen & Toubro sits at 33 times, slightly exceeding its long-term average of 31 times. Conversely, Vedanta trades at 11.7 times against a five-year average of 22.4 times, and BHEL’s 92.3 times multiple remains below its long-term average of 115.1 times.
Equity performance among nuclear-linked entities has been highly divergent in 2026. While MTAR Technologies has surged 195.1 percent, BHEL gained 47.8 percent, and Adani Power rose 43.7 percent, other major players have lagged. Reliance Industries has fallen 15.8 percent, with Larsen & Toubro down 0.5 percent and Tata Power up a marginal 0.4 percent, though Vedanta and Walchandnagar Industries have risen 16.7 percent and 17.7 percent, respectively.
Over the long term, developers like NTPC, Tata Power, and Reliance, alongside equipment manufacturers such as L&T and BHEL, are positioned to benefit if India’s small modular reactor ambitions materialize. For now, however, the market appears to be pricing in a reality that remains years away from actual revenue generation.
