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2024 witnesses record-breaking real estate IPOs; capital raised to the tune of INR 135 Bn
2024 witnesses record-breaking real estate IPOs; capital raised to the tune of INR 135 Bn

November 5, 2024

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~47 Real Estate IPOs listed since 2010; More than INR 300 Bn raised from 20+ IPOs in post-pandemic era (2021 onwards). Housing Finance Companies (HFCs) and REITs account for almost 70% of funds raised by real estate IPOs since 2021.

 

India continues to exhibit strong economic growth prospects and business optimism is reflected in the increasing number of Initial Public Offerings (IPOs) in recent years. The traction in the number and volume of public issues lends credibility to an environment of higher corporate earnings, rising participation by retail and institutional investors, and availability of adequate liquidity in the market. With 123 fresh issues (As of 20th October 2024) across multiple sectors, 2024 has already surpassed the total number of IPOs witnessed in 2023. 

Taking cognizance of numerous factors such as strong housing demand, record-breaking office leasing activity, expansion plans of flex space operators, and an uptick in tourism, sentiments in the real estate sector have been positive. The strong momentum in Indian real estate is echoed in the fact that real estate IPOs have raised nearly INR 135 billion from the markets in 2024, almost double the amount raised in 2023. 

 IPO trend: Heightened activity in recent years

Housing finance companies (HFCs) followed by REITs and real estate developers drive IPOs in the post-pandemic period

Real estate, a pivotal component of India’s GDP, has witnessed a marked uptick in IPO activity in recent years, particularly in the post-pandemic period. Since 2021, the bourses have 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). Traction in IPOs in real estate is largely led by housing finance institutions, that attracted 46% of the capital raised during 2021-2024, followed by REITs, at 22% share. Leading real estate developers with a primary focus on residential assets too raised significant funds at INR 56 billion, more than 10X compared to the preceding four-year period.

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. Furthermore, the expectation of a probable reduction in the lending rates can further boost real estate activity. 

Trend in real estate IPOs and category-wise break-up

 

Real estate filings and listings pick up new-found pace in 2024

In recent years, real estate IPOs on the stock exchanges have not only grown in volume but have also diversified into newer categories as well. 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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Colliers India
Sukanya Dasgupta, Head Marketing and Communications - sukanya.dasgupta@colliers.com

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