Between January to September 2024, Indian real estate developers capitalized on the burgeoning market by raising INR 12,801 crore via Qualified Institutional Placements (QIPs), marking a significant share of the total QIP issuance of INR 75,923 crore across all sectors. This places real estate second only to renewable energy in terms of QIP fundraising.
The recent activity follows a trend where six developers collectively raised INR 5,275 crore through Initial Public Offerings (IPOs) since 2021, with Macrotech Developers (Lodha) leading the way, securing nearly INR 2,500 crore. The heightened financial strength of developers has facilitated the launch of approximately 13.62 lakh housing units in the top seven cities from 2021 to September 2024, reflecting a robust recovery in the residential market post-pandemic.
Anuj Puri, Chairman of ANAROCK Group, highlighted that by the third quarter of 2024, the real estate sector contributed over 17% to the total QIP issuance, indicating strong institutional investor confidence. “This significant QIP activity underscores the sector’s critical role in India’s capital markets,” he noted.
The post-pandemic recovery has spurred housing demand, prompting developers to actively introduce new inventory. In the same timeframe, around 14.36 lakh housing units were sold in these cities, leading to a 10% decrease in unsold inventory from Q3 2021 to Q3 2024.
Key drivers for this increased QIP and IPO activity include improved transparency due to regulations such as RERA and GST, which have bolstered investor confidence. The market demand for high-quality residential projects has surged, allowing developers to leverage favorable conditions for new launches. In 2024 alone, residential sales value reached INR 4.2 lakh crore, a 22.6% increase from 2023.
With the Nifty Realty Index seeing nearly 250% growth since January 2021, institutional investors are increasingly optimistic about the sector’s potential, underscoring the real estate market’s ability to attract both retail and institutional capital.
