Housing Finance IPOs fuel 46% of real estate fundraising; ₹31,900 crore raised in four years: Colliers #IndiaFinance

India’s Housing Finance Companies (HFCs) contributed 46 per cent to the fundraising activities from public markets through the initial public offering (IPO) route, according to a research report by Colliers India.

The real estate industry, which includes HFCs, Real Estate Investment Trusts (REITs), real estate developers, flex space operators, hospitality companies, and others, raised a total of ₹31,900 crore from the public markets through listing on the exchanges between 2021 and 2024, according to the report.

Out of the ₹31,900 crore raised from IPOs, the housing finance companies raised ₹14,690 crore, which marks up to 46 per cent of the total pool of money raised in a span of four years.

India’s stock market

India’s stock market shows strong growth potential, with 123 new public issues across various sectors as of October 20. Compared to its 2023 levels, the stock market crossed its previous record IPO listing figures in 2024.

As the market continues to grow, the strong economic growth prospects and optimism from businesses are reflected in the increasing number of IPOs in the stock market in recent years. This is partially due to higher corporate earnings, rising retail and institutional investor participation, and availability of adequate liquidity in the market, as per the report.

India continues to show strong growth prospects and business optimism as reflected in the increasing number of IPOs in the stock market.

Real Estate Sector Growth

The rise in housing demand, record office leasing activities, expansion plans of flex space operators and a rise in tourism have been the positive driving factors for the real estate sector.

According to the Colliers report, real estate IPOs raised nearly ₹13,500 crore from the public markets in 2024, nearly double the level in 2023.

From 2021 to 2024, the market has witnessed 21 real estate IPOs, higher than the 11 listings in the four years between 2017 and 2020. According to the Colliers data, a major proportion of the funds were raised by HFCs, followed by REITs at 22 per cent, real estate developers at 17 per cent, hospitality companies at 13 per cent, and flex space operators at 2 per cent.

“Since 2021, housing finance companies have formed a majority proportion of the IPOs within the domain of real estate at 46%. This was followed by REITs at 22% and real estate developers at 17% who have accessed the primary market. The positive outlook for IPO activity in India is underpinned by higher investment in infrastructure, favorable demographics, andhigher consumer spending supported by a conducive regulatory framework,” said Badal Yagnik, chief executive officer of Colliers India.

The research agency also stated that underlying assets like Grade A offices and malls are likely to see continued momentum in the near-midterm, and the expectation of a probable reduction in lending rates may boost real estate activity further.

“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 & Head of Research, Colliers India.