Real estate developers in India raised Rs 12,801 crore through qualified institutional placements (QIPs) in the first nine months of this year, which constitutes more than 17 percent of the total QIP issuance across sectors at Rs 75,923 crore, a report showed on Monday.
Real estate came in the second highest among sectors to raise funds through QIP so far this year after renewable energy.
This robust QIP activity underlines the sector's critical importance within India's overall capital markets - and the increasing trust of institutional investors in Indian real estate, " said Chairman of Anarock Group, Anuj Puri.
According to the report, improved transparency, excellent post-pandemic rebound in residential real estate along with robust investor confidence works to fuel a surge in this activity, thus setting this sector up for continued expansion.
Publicly traded companies can raise funds through the QIP route by offering equities or securities convertible into equity to pre-approved institutional buyers. The approach of raising funds allows the company to bypass the more traditional IPO route and raises considerable funds in a very short time.
Strong housing sales growth post-pandemic has led top developers to open up relevant inventory across markets.
According to the report, more than 13.62 lakh units have been launched in the top seven cities between 2021 and this year (January-September).
Housing sales in these cities have almost touched 14.36 lakh units in this period. Effervescent sales have resulted in an over 10 percent decline in unsold housing inventory in this period despite the high rate of supply addition.
To finance their agressive expansion, these developers are approaching IPO and the QIP route. Their success in these capitalization efforts underscores that sector is still busy attracting retailers and institutional investors. We expect investor participation to grow manifold in the coming years, Puri said.
Strong post-pandemic homebuyer demand has also prompted developers to raise funds via IPOs to fund new project launches across geographies. Since 2021, six developers have collectively raised Rs 5,275 crore through mainstream IPOs.
