Indian Real Estate Developers Secure Rs 12,801 Crore Via QIP Route In Jan-Sep Period

The QIP (Qualified Institutional Placement) route allows publicly-traded companies to raise capital by offering equities or securities convertible into equity to pre-approved institutional buyers.

Mumbai: Real estate developers in India raised Rs 12,801 crore via qualified institutional placements (QIPs) in the first nine months this year, which is over 17 per cent of the total QIP issuance across sectors at Rs 75,923 crore, a report showed on Monday. After renewable energy, real estate came in second highest among sectors to raise funds through QIP so far this year.

“This strong QIP activity highlights the sector’s crucial role in India’s broader capital markets - and the institutional investors' growing confidence in Indian real estate,” said Anuj Puri, Chairman, Anarock Group.

According to the report, enhanced transparency, a robust post-pandemic residential real estate recovery, and strong investor confidence are factors driving a surge in activity, thereby positioning the sector for continued growth.

The QIP route allows publicly-traded companies to raise capital by offering equities or securities convertible into equity to pre-approved institutional buyers. This fundraising approach lets companies skip the more conventional initial public offering (IPO) route and quickly raise substantial funds.

Robust housing sales growth after the pandemic has prompted leading developers to unleash relevant inventory across markets. As per the report, over 13.62 lakh units have been launched across the top seven cities between 2021 and this year (January-September).

Concurrently, housing sales in these cities have soared to nearly 14.36 lakh units in this period. Effervescent sales led to an over 10 per cent decline in unsold housing inventory in this period, despite the high rate of supply addition.

To fund their aggressive expansion, these developers are turning to IPOs and the QIP route. Their success in these capitalisation efforts underscore the sector’s continued ability to attract both retail and institutional investors. We expect investor participation to grow manifold in the coming years,” said Puri.

Simultaneously, the strong post-pandemic homebuyers demand has also prompted developers to raise funds via IPOs to fund new project launches across geographies. Since 2021, six developers have collectively raised Rs 5,275 crore through mainstream IPOs.