QIP Fundraising Hits Record High in 2024, Real Estate Leads with Rs.22,320 Cr
The recent turbulence in the Indian stock market, leading to steep corrections, have left investors wary. The ongoing correction began in late September 2024 after record highs in both the Nifty 50 and Sensex indices - since then, these key indices have declined markedly and continue to bleed. In sharp contrast, the fundraising momentum through Qualified Institutional Placements (QIPs) struck high notes in 2024, finds ANAROCK research. While retail and short-term investors react to volatility with caution, institutional investors have been doubling down on long-term growth opportunities in Indian real estate.
Anuj Puri, Chairman - ANAROCK Group, says, "ANAROCK’s analysis of the surge in QIP fundraising in 2024 highlights the real estate sector's continued might amid strong institutional confidence in India’s economic fundamentals. Despite market fluctuations, capital markets remain robust, and companies continue to attract strategic investments. Our research shows that the real estate sector remained a dominant contributor in 2024, with eight developers and one REIT collectively raising a total of INR 22,320 Cr. In short, robust financial positioning supports the massive influx of upcoming real estate developments."
Overall, fundraising via QIPs across sectors hit an all-time high in 2024 with a total of 99 issues raising over INR 1,41,482 crore. This issue amount marks a 75% increase over the previous all-time high of INR 80,816 Cr in 2020.
Source: NSE & ANAROCK Research
"The real estate sector, including developers and REITs, ranked first in QIP fundraising both in terms of capital raised and the number of issues," says Puri. "Notably, we saw twice the number of QIP issues in 2024 than in the previous year. This sets a record for the highest number of issues in a single year. Institutional investors remain extremely bullish on the real estate sector's growth potential."
Source: NSE & ANAROCK Research
Previous Year Trend - In 2023, a total of 43 QIP issues raised about INR 55,109 Cr across sectors, closely matching the total QIP fundraise of INR 56,152 Cr in 2017. The real estate fund raising trend through QIPs in 2023 was nil, meaning that real estate developers did not raise any funds via this route that year.
Source: NSE & ANAROCK Research
The QIP Rationale
* QIPs are a faster and more cost-effective way for developers to raise capital than private equity and bank loans.
* They offer liquidity without excessive shareholder dilution and preserve ownership structures while enabling larger projects and investments. Institutional investors like mutual and pension funds bring substantial capital to fuel sectoral growth.
* The flexibility in fund allocation - whether for land acquisition, construction, or debt refinancing - adds a critical level of financial stability.
* A successful QIP boosts market credibility and sends out strong growth potential signals, thereby attracting even more investments.
Collectively, these benefits accelerate project timelines and allow developers to execute ambitious expansion.
In 2024, both the Nifty and Sensex reflected significant volatility in the Indian equity markets. Nifty 50, representing large-cap stocks, showed a bracing upward trend in the H1 2024 thanks to robust corporate earnings, increased foreign institutional investment, and positive economic indicators such as GDP growth and declining inflation rates. However, the year went on to see considerable volatility due to global geopolitical tensions, fluctuating oil prices, and shifts in global monetary policies. Market corrections towards the latter part of 2024 saw investors react predictably to tightening fiscal policies and profit-booking activities.
Despite volatility, five Nifty indices surged over 30% in 2024- and notably, the Real Estate index secured the 4th spot, posting a strong 34.67% annual gain.
Outlook 2025
"The overall volatility, particularly in H2 2024, suggests a mixed outlook for QIP funding in the real estate sector in 2025," says Puri. "While tightening fiscal policies and global uncertainties may temper broader equity market sentiment, the strong performance of the Real Estate index despite volatility is a testament to sustained investor interest in the realty sector."
Given that QIPs are driven by institutional investor confidence, there are strong indications that large and listed developers will continue to draw significant funding in 2025. Investors seeking stability amid broader market fluctuations will see real estate as a good hedge against volatility. Also, if global monetary policies stabilize and domestic economic indicators remain positive, QIP activity in Indian real estate will gain further momentum and continue to fuel expansion, land acquisitions, and debt refinancing among these players.
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