Five Nifty indices surged over 30% in 2024 with the Real Estate index securing the 4th spot, posting a strong 34.67% annual gain
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Following a period of high growth in both the Nifty 50 and Sensex indices, the Indian Stock market was hit with steep corrections since late September 2024, causing uncertainty among investors.
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Despite the stock market's volatility, while retail and short-term investors react to volatility with caution, institutional investors such as large funds or organisations have continued to invest heavily in long-term opportunities in Indian real estate.
Five Nifty indices surged over 30% in 2024 with the Real Estate index securing the 4th spot, posting a strong 34.67% annual gain.
One of the key drivers of this real estate interest is Qualified Institutional Placements (QIPs), a method companies use to raise funds by issuing shares to institutional investors. In 2024, the fundraising momentum through QIPs in the real estate industry struck high notes, as per ANAROCK research.
Research shows that the real estate sector remained a dominant contributor last year, with eight developers and one REIT collectively raising a total of Rs. 22,320 cr.
“In short, robust financial positioning supports the massive influx of upcoming real estate developments”, says ANAROCK chairman Anuj Puri.
A total of 99 issues across various sectors raised over Rs. 1,41,482 crore through QIPs hitting an all-time high in 2024, marking a 75% increase over the previous all-time high of Rs. 80,816 Cr back in 2020.
"The real estate sector, including developers and REITs, ranked first in QIP fundraising both in terms of capital raised and the number of issues," says Puri.
He further said, "Notably, we saw twice the number of QIP issues in 2024 than in the previous year. This sets a record for the highest number of issues in a single year. Institutional investors remain extremely bullish on the real estate sector's growth potential."
In 2023, the real estate fundraising trend through QIPs was nil, which means that the real estate developers did not raise any funds via this route that year.
QIPs are a faster and more cost-effective way for developers to raise capital than private equity and bank loans offering liquidity without excessive shareholder dilution and preserving ownership structures while enabling larger projects and investments.
Collectively, these benefits accelerate project timelines allowing developers to execute ambitious expansion.
According to Puri, “the overall volatility, particularly in H2 2024, suggests a mixed outlook for QIP funding in the real estate sector in 2025."
"While tightening fiscal policies and global uncertainties may temper broader equity market sentiment, the strong performance of the Real Estate index despite volatility is a testament to sustained investor interest in the realty sector," he added.
Investors seeking stability amid broader market fluctuations will see real estate as a good hedge against volatility, as per ANAROCK research.
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