Indian Real Estate Sector Raises Rs 13,500 Crore in 2024 IPOs
- Jeffro Jerin
- Oct 29, 2024
- 2 min read
The Indian real estate market has seen a remarkable increase in capital raised through Initial Public Offerings (IPOs) and Qualified Institutional Placements (QIPs) this year, driven by factors such as enhanced transparency, a strong post-pandemic recovery, and growing investor confidence, according to an Anarock report.
IPOs: Key to Capital Growth
As of 2024, the real estate sector has secured nearly Rs 13,500 crore via IPOs—almost double the amount raised in 2023, marking a record-breaking year with 123 fresh IPOs issued by October 20. Since 2021, 21 real estate companies have collectively raised Rs 31,900 crore, significantly exceeding previous years.
Dominance of Housing Finance Companies and REITs
Housing Finance Companies (HFCs) and Real Estate Investment Trusts (REITs) have driven the majority of funds raised, comprising nearly 70% of total IPO proceeds in the real estate sector since 2021.
Market Optimism Powers Over-Subscribed IPOs
The robust demand for housing, record office leases, and the expansion of flex-space operators have fueled strong market sentiment. Notably, every real estate IPO in 2024 was oversubscribed, reflecting the sector's buoyancy.
Shifts in IPO Trends (2010-2024)
2010-2016: HFCs dominated with 42% of IPO funds.
2017-2020: REITs took the lead with a 60% share.
2021-2024: HFCs maintained 46% dominance, followed by REITs (22%) and real estate developers (17%).
QIPs: An Attractive Option
In the first three quarters of 2024, QIP issuances by the real estate sector raised over Rs 12,801 crore, making it the second-largest contributor after renewable energy.
Factors Boosting Sector Growth
The sector’s growth is supported by improved transparency, robust residential demand, enhanced cash flow, and strong stock market performance. The Nifty Realty Index’s gains have further attracted investors.
Outlook for the Future
The positive trajectory of the real estate sector is anticipated to continue, with sustained demand across residential, commercial, and retail markets, and potential rate cuts. Moreover, multiple companies, including Small and Medium REITs (SM-REITs), are preparing for IPOs, signaling continued expansion.
India’s real estate sector is maturing, attracting increased investor interest, and is expected to remain an active ground for IPOs and QIPs in the coming years.
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