The real estate sector has emerged as the second highest in Qualified Institutional Placements (QIP) after renewable energy in India, with developers raising around Rs 12,801 crore in the first nine months of 2024.
Anuj Puri, Chairman, ANAROCK Group, said that an analysis of the available data trends of listed developers on the National Stock Exchange (NSE) shows that by the third quarter of the calendar year 2024, the real estate sector had over 17 percent share of QIP issuance across sectors, or Rs 12,801 crore of the total Rs 75,923 crore raised.
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Renewable energy is the highest contributor among sectors in QIP fundraising at 19 percent (Rs 14,425 crore) so far this year. Other prominent contributors are Metals (15 percent), Automotive and Transport (10 percent), Manufacturing (9 percent), IT/ITES (7 percent), Banks (5 percent), Oil and Gas (4 percent), Construction and Engineering (3 percent) and Others (10 percent), the data showed.
QIPs allow publicly traded companies to raise capital by offering equities or securities convertible into equity to pre-approved institutional buyers.
"This strong QIP activity highlights the real estate sector’s crucial role in India’s broader capital markets – and the institutional investors' growing confidence in Indian real estate," Puri said.
Simultaneously, the strong post-pandemic home demand also prompted developers to raise funds via Initial Public Offerings (IPOs) to fund new project launches across geographies.
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Six realty firms collectively raised Rs 5,275 crore via IPOs since 2021. Macrotech Developers (Lodha Group) alone raised nearly Rs 2,500 crore.
Other developers include who raised funds via IPOs since 2021 till date are Signature Global (Rs 730 crore), Keystone (Rs 635 crore), Sriram Properties (Rs 600 crore), Arkade Developers (Rs 410 crore), Suraj Estate (Rs 400 crore).
Factors driving IPO and QIP traction
Experts said that robust housing sales growth, strong post-pandemic recovery, surge in residential sales value and transparency in the sector are some of the key factors driving the QIP and IPO traction.
Post-2020, the real estate sector rebounded strongly, with Grade A developers leading the charge. Market demand for high-quality residential projects has surged, and developers have been quick to capitalise on this with new project launches.
Robust housing sales growth after the pandemic has prompted leading listed developers to release relevant inventory across markets. As per ANAROCK research, over 13.62 lakh units have been launched across the top seven cities between 2021 and September 2024.
Concurrently, housing sales in these cities have soared to approximately 14.36 lakh units in this period.
As per ANAROCK Research, in the first nine months of 2024, residential sales value reached Rs 4.2 lakh crore – a 22.6 percent increase over the same period in 2023 and 115 percent growth over the total sales value recorded in 2021.
This surge in sales value is directly boosting developers' cash flow, allowing them to take on new projects and meet rising demand, further improving investor sentiment, experts said.
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“To fund their aggressive expansion, developers are turning to the IPOs and QIP route. Their success in these capitalisation efforts underscores the sector’s continued ability to attract both retail and institutional investors. We expect investor participation to grow manifold in the coming years,” Puri added.
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