Since 2010, India has seen 47 real estate IPOs, raising more than INR 300 billion, with a notable acceleration in recent years.
India’s robust economic growth prospects are mirrored by the rising number of Initial Public Offerings (IPOs) in recent years. This surge in public issues underscores an environment of higher corporate earnings, increased participation from both retail and institutional investors, and ample market liquidity. With 123 fresh issues (As of 20th October 2024) across multiple sectors, 2024 has already surpassed the total number of IPOs witnessed in 2023.
The year 2024 has been remarkable for India’s real estate sector, with IPO activity reaching unprecedented levels. As of October 2024, real estate IPOs have raised approximately INR 135 billion, marking nearly a twofold increase over the previous year. This surge, amidst India’s dynamic economic growth, reflects strong momentum in Indian real estate, driven by favorable investor sentiment and strong demand across residential, commercial, and retail segments.
Housing finance companies (HFCs) followed by REITs and real estate developers drive IPOs in the post-pandemic period
Since 2010, India has seen 47 real estate IPOs, raising more than INR 300 billion, with a notable acceleration in recent years. The post-pandemic period, from 2021 onwards, particularly has been a transformative time for real estate IPOs in India. During 2021-2024 period, India has witnessed 21 real estate IPOs, significantly higher than the 11 listings in the previous four years, during 2017-2020. In the post-pandemic era, 21 real estate companies have raised INR 319 billion through IPOs, more than double the funds raised in the preceding four-year period (2017-2020).
IPO trend: Heightened activity in recent years
During 2021-24 period, Housing Finance Companies (HFCs) have led the way, raising 46% of the total capital raised from real estate IPOs, while REITs have accounted for a 22% share. The success of REITs in India is reflective of investors’ strong appetite for operational and income-generating assets such as Grade A commercial developments and malls. Real estate developers, particularly those focused on residential assets, too attracted significant capital, raising over INR 55 billion in this period—a tenfold increase compared to the preceding four-year period.
Trend in real estate IPOs and category-wise break-up
In recent years, the volume surge in real estate listings on the stock exchanges has been accompanied by diversification of the real estate IPOs into new categories. Leading flex space operators are now entering the IPO arena, and in a way indicates the maturity of the real estate market in the country. Amidst the prevailing business optimism, numerous real estate enterprises, including flex operators and Small and Medium REITs (SM-REITs), along with notable real estate developers have already queued up for their IPOs with the Regulator.
The BSE Realty Index too has delivered impressive year-to-date gains of over 30%, significantly outperforming the Sensex. Notably, nearly one-fifth of real estate IPOs since 2010 have outperformed the realty index in 2024. Additionally, over 90% of the real estate IPOs listed this year have been oversubscribed, reflecting positive market sentiment and strong investor confidence in the sector.
Looking Ahead: An Optimistic Outlook
India’s real estate sector is set for continued expansion in the coming years, underpinned by strong demand across multiple asset classes. The anticipated easing of lending rates could further stimulate market activity, particularly for HFCs and REITs, which play a key role in financing both residential and commercial real estate developments.
Moreover, the positive outlook for real estate IPO activity in India will continue to derive strength from significant investment in infrastructure, favorable demographics, and higher consumer spending supported by a conducive regulatory framework.
About the Authors:
Pallavi Kukdolkar, Manager | Research, Colliers
Lopa Raval, Assistant Manager | Research, Colliers
