New Delhi, October 29
The companies related to real estate sector raised nearly Rs 135 billion by IPOs from the markets in 2024, highlighted a report by Colliers, an investment management company.
The strong momentum in Indian real estate is echoed in the fact that real estate IPOs have raised almost double the amount raised in 2023.
The report also sheds light on the ongoing momentum in the Indian real estate market, where IPO activity has picked up markedly since the pandemic.
"Real estate, a pivotal component of India's GDP, has witnessed a marked uptick in IPO activity in recent years, particularly in the post-pandemic period. Since 2021, the bourses have witnessed 21 real estate IPOs, significantly higher than the 11 listings in the previous four years, during 2017-2020," the report stated.
It also highlighted that in total, 21 real estate firms have collectively raised Rs 319 billion through IPOs in the last three years, more than doubling the amount collected between 2017 and 2020.
As per report the key driver behind the growth in real estate IPOs is the rising demand across the residential, commercial, and retail segments. This interest is reflected in the diversity of companies raising capital, including housing finance companies (HFCs), real estate investment trusts (REITs), and leading property developers.
According to the report, housing finance institutions attracted 46 per cent of the total capital raised by the sector through IPOs from 2021 to 2024, establishing themselves as the largest contributors. REITs followed closely, capturing a 22 per cent share, while developers, particularly those focusing on residential assets, raised a significant Rs 56 billion--an amount that is over 10 times higher than what was raised in the prior four-year period.
The report also emphasizes the crucial role of housing finance companies and REITs in the recent IPO activity.
"Since 2021, housing finance companies have formed a majority proportion of the IPOs within the domain of real estate at 46 pc. This was followed by REITs at 22 pc and real estate developers at 17 pc who have accessed the primary market. The positive outlook for IPO activity in India is underpinned by higher investment in infrastructure, favorable demographics, and higher consumer spending supported by a conducive regulatory framework" said Badal Yagnik, Chief Executive Officer of Colliers India.
This trend signals an evolution within the Indian real estate market, where both traditional real estate firms and newer, innovative players are finding opportunities to raise funds through the public markets.
With favorable conditions on the horizon, including anticipated lending rate cuts and supportive regulatory frameworks, India's real estate sector is poised for continued growth. The robust activity in real estate IPOs signals confidence in the sector's outlook and highlights its essential role in India's economic landscape.