QIP issuances by real estate developers reached ₹12,801 crore from January to September 2024, marking the second-highest amount after the renewable energy sector

From January to September 2024, QIP issuances across all sectors totaled ₹75,923 crore, with real estate accounting for 17% of the share, following renewable energy at 19%.

The real estate sector has emerged as India’s second-largest contributor in Qualified Institutional Placements (QIP) after renewable energy, with developers raising around ₹12,801 crore in the first nine months of 2024.

Anuj Puri, Chairman of ANAROCK Group, stated that an analysis of listed developers on the National Stock Exchange (NSE) reveals that by the third quarter of 2024, the real estate sector held a 17% share of QIP issuances across all sectors, equating to ₹12,801 crore out of the total ₹75,923 crore raised.

The renewable energy sector led QIP fundraising with a 19% share (₹14,425 crore), followed by other prominent sectors: Metals (15%), Automotive and Transport (10%), Manufacturing (9%), IT/ITES (7%), Banks (5%), Oil and Gas (4%), Construction and Engineering (3%), and Others (10%).

Qualified Institutional Placements enable publicly traded companies to raise capital by offering equities or equity-convertible securities to select institutional investors.

“This high level of QIP activity underlines the real estate sector’s significant role in India’s capital markets and institutional investors’ rising confidence in Indian real estate,” said Puri. Additionally, strong post-pandemic demand for homes has driven developers to raise funds via Initial Public Offerings (IPOs) to finance new project launches across various regions.

Since 2021, six real estate firms have collectively raised ₹5,275 crore through IPOs. Macrotech Developers (Lodha Group) alone secured nearly ₹2,500 crore, with other developers such as Signature Global (₹730 crore), Keystone (₹635 crore), Sriram Properties (₹600 crore), Arkade Developers (₹410 crore), and Suraj Estate (₹400 crore) also raising funds.

Factors Driving QIP and IPO Growth

Experts highlight that robust housing sales, a strong post-pandemic recovery, increased residential sales values, and enhanced transparency in the sector are fueling growth in QIPs and IPOs.

Post-2020, the real estate sector rebounded strongly, led by Grade A developers. Market demand for high-quality residential projects has surged, and developers have responded by launching new projects.

Housing sales growth across top cities has been notable; ANAROCK research shows that over 13.62 lakh units were launched from 2021 to September 2024, while sales reached approximately 14.36 lakh units during the same period. In the first nine months of 2024, residential sales value reached ₹4.2 lakh crore—a 22.6% increase over 2023 and a 115% rise compared to 2021.

This surge in sales value boosts cash flow for developers, allowing them to meet rising demand and improving investor confidence.

“To support their ambitious growth, developers are turning to IPOs and QIPs,” Puri added. “Their success in these fundraising efforts demonstrates the sector’s continued appeal to both retail and institutional investors. We anticipate substantial growth in investor participation in the years ahead.”