by THO
Amid a strong momentum in the real estate sector, seven realty companies have raised a total of ₹135.5 billion via initial public offerings (IPO) in 2024, a report released by property consultancy Colliers on October 29 said. This is almost double the amount raised in 2023.
Furthermore, since 2021, the bourses have witnessed 21 real estate IPOs raising ₹319 billion, compared to 11 listings in the previous four years i.e. between 2017-2020.
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According to the report, traction in IPOs in real estate is largely led by housing finance institutions, which attracted 46% of the capital raised during 2021-2024, followed by REITs, at a 22% share.
Leading real estate developers with a primary focus on residential assets too raised significant funds at ₹56 billion, more than 10X compared to the preceding four-year period, the report said.
“Driven by strong demand across residential, commercial, and retail segments, IPOs by real estate developers, HFCs, and REITs with underlying assets such as Grade A offices and malls are likely to see continued momentum in the near-mid-term,” the report noted. It added that the expectation of a probable reduction in the lending rates may further boost real estate activity.
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“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, Colliers India.
Real estate filings and listings pick up new-found pace in 2024
The report pointed out that in recent years, real estate IPOs on the stock exchanges have not only grown in volume but also diversified into newer categories. Leading flex space operators have been expanding their portfolios across cities and expediting their IPO plans. In the near to medium term, several enterprises including flex operators, Small and Medium REIT (SM-REIT), amongst other developers within real estate have already queued up for their IPOs with the regulator.
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“At over 30% gains, the year-to-date performance of the BSE Realty Index has been impressive, significantly outpacing the Sensex. Interestingly, almost one-fifth of the real estate IPOs since 2010 have outperformed even the realty index in 2024. Over 90% of the real estate IPOs listed in the ongoing year have been oversubscribed, an indication of positive market sentiment and investor confidence in the sector,” said Vimal Nadar, Senior Director and Head of Research, Colliers India.
