India’s nuclear power sector is entering a new phase, with companies already scouting sites for potential projects.

NTPC Ltd has identified more than thirty locations across several states and has begun preliminary studies at ten of them. Adani Power is evaluating sites in Madhya Pradesh, while Tata Power has shortlisted locations in Madhya Pradesh, Odisha and Gujarat.

These moves are taking place even as the rules governing private participation are still being finalised, creating a dilemma for investors who must decide whether the SHANTI Act offers an actionable opportunity now or whether the market is running ahead of a story that could take years to materialise.

The draft rules have been placed in the public domain for consultation, with feedback open until 4 September.

The SHANTI Act, which came into force on 20 December 2025 after receiving presidential assent, seeks to modernise India’s nuclear sector by bringing various aspects of nuclear development under a single framework and supporting the country’s long-term energy goals.

The draft SHANTI Rules, 2026 mark a major policy shift by opening civil nuclear power generation to private players. The framework introduces a single composite licence, allows access to approved domestic and international technologies, and expands nuclear energy use beyond power generation, while retaining stringent safety and liability requirements.

Rupesh Sankhe, senior vice president Power Utilities, Capital Goods at Elara Capital, explained that the framework introduces a single licence for building, owning and operating nuclear facilities, allows access to approved domestic and foreign technologies, and expands nuclear use beyond electricity generation to areas such as captive power, industrial heat and hydrogen production.

At the same time, private entry remains subject to strict financial, technical, safety, fuel supply, liability, waste management and decommissioning requirements. Sankhe noted that the move could significantly boost India’s small modular reactor ambitions, benefiting developers such as NTPC, TATA Power, Reliance, Adani Power and Jindal Nuclear.

It could also create a sizeable opportunity for EPC and equipment players including Larsen & Toubro, Bhel, Power Mech, MTAR Technologies and Walchandnagar Industries.

Despite the policy shift, analysts caution that it does not translate into a near-term earnings opportunity. Sudhanshu Bansal, power research analyst at JM Financial Institutional Securities, views the SHANTI draft rules as an important step forward but stresses that the nuclear opportunity remains a long-term story.

He estimates it could take another six to eight months for the rules to be finalised, followed by the release of detailed standard operating procedures, a process that could stretch another ten to twelve months. He highlighted challenges around fuel availability, liabilities, technology adoption and talent availability, remarking that “it’s easier said than done.”

Bansal believes it is still too early for investors to buy power stocks purely on the SHANTI narrative. In the long run, however, companies interested in nuclear power generation and nuclear equipment manufacturing, including Adani Power, NTPC, TATA Power, L&T and BHEL, stand to be among the biggest beneficiaries if India’s nuclear ambitions gather momentum.

The timing of the investment case is therefore critical. Even after the rules and operating procedures are in place, companies will need to move from site identification and preliminary studies towards actual projects.

Valuations add another layer of caution, with most power generation and equipment supplier stocks appearing fairly valued given strong visibility on power demand, significant capital expenditure and earnings.

Agencies