Numbers speak the loudest. So, heed the following pieces of data: One, as much Rs 13,500 crore raised by Real Estate IPOs in 2024, which is twice the amount raised in 2023. Two, all real estate IPOs this year have been oversubscribed. As India displays a distinct trend of more and more sales of premium-end housing, more and more housing finance companies (HFCs) and REITs begin to raise money from the market.
By the way, till October 20, there have been an astounding 123 IPOs overall in India, which is more than the number achieved in the full calendar year of 2023. The IPOs in the real estate have been powered by the tailwinds of strong housing demand, high office leasing activity, rise in tourism etc.
The rise in real estate IPOs in 10 years
See how the number of real estate IPOs have climbed after the Covid pandemic. The number of real estate IPOs vis-à-vis the total number of IPOs in the past 10 years follow: in 2015, 2 real estate IPOs (among a total of 58 IPOs); in 2016, 2 out of 70; in 2017, 3 out of 93; in 2018, 4 pout of 88; in 2019, 22 out of 55; in 2020, 2 out of 36; in 2021, 6 out of 98; in 2022, 3 out of 99; in 2023, 5 out of 120 and in 2024 so far, 7 out of 123.
Real estate IPOs include new categories
What is significant is that real estate IPOs are not only becoming more and more frequent but also diversifying into newer categories. Small and Medium REIT (SM-REIT), among other developers within the real estate universe are queuing up for their IPOs with the Regulator.
BSE Realty index rose faster than Sensex
“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 markets sentiment and investor confidence in the sector.” said Vimal Nadar, senior director & head of research, Colliers India.
