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Indian real estate attracts nearly Rs 74K cr till Dec'24 from AIFs: Anarock
AIF means any fund established or incorporated in India which is a privately pooled investment vehicle that collects funds from sophisticated investors, whether Indian or foreign, for investing it in accordance with a defined investment policy for the benefit of its investors.
Real estate consultant Anarock has compiled Sebi data related to AIFs, which invest in non-traditional assets like private equity, hedge funds, and real estate - offer niche, high-risk, high-reward opportunities suited for experienced investors.
Till December 2024, AIFs have cumulatively invested Rs 5,06,196 crore across all sectors. The real estate sector accounted for the largest share of 15 per cent of cumulative net AIF investments at Rs 73,903 crore.
"The rise of AIFs has significantly transformed real estate financing in India, offering a crucial lifeline to projects struggling with lack of funding and unlocking new opportunities for developers," Anarock said.
AIFs have invested Rs 30,279 crore in IT/ITeS, Rs 26,807 crore in financial services, Rs 21,929 crore in NBFCs, Rs 21,273 crore in banks, Rs 18,309 crore in pharma, Rs 12,743 crore in FMCG, Rs 11,550 crore in retail and Rs 11,433 crore in the renewable energy sector. Other sectors received Rs 2,77,970 crore from AIFs.
Prashant Thakur, Regional Director & Head Research at Anarock Group, said, "Amidst increasing constraints on traditional funding sources, AIFs are an agile and innovative financing mechanism to address capital gaps at various stages of real estate development." "Since they pool capital from domestic and foreign investors, AIFs are a sustainable and scalable funding ecosystem. Going forward, the adoption of blended finance models, AI-driven risk assessments, and streamlined regulatory frameworks maximise the impact of AIFs further," he added.
The number of AIF active in the market has grown 36-fold over the past decade - from 42 by March 31, 2013, to 1,524 AIFs as of March 5, 2025, with commitment raised increasing five-fold since 2019.
Commenting on the report, Mumbai-based Mt. K Kapital Founder and Managing Director Binitha Dalal said, "Real estate's continued dominance in AIF allocations is a natural outcome of how investors are rethinking their portfolios. Real assets are now being approached as part of financial portfolios, not just physical holdings." "This shift reflects not only a change in mindset, but also the increasing availability of new funds and structures tailored to varied risk-return profiles. It's a clear indicator of the market's depth and evolution- real estate today is as much a financial product as it is a physical asset," she said.
Ankur Jalan, CEO of Golden Growth Fund, said the AIFs have become an important investment vehicle for institutional investors and HNIs, and have also widened the scope for developers to secure funding.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
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