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Business Standard

Private equity, M&A drive 3x jump in real estate capital in FY25

Capital raising in India's real estate sector in the financial year 2025 (FY25) tripled to 17 deals raising ₹32,852.6 crore, from five deals raising ₹10,955.4 crore in FY24, according to Equirus Capital, a financial services firm. The sharp uptick was driven by a rise in private equity and M&A activity, both domestic and international, and an increase in average transaction value, the report stated. This boom in capital flows has been observed despite a decline in the secondary market performance of listed real estate stocks across large-, mid-, and small-cap segments—all of which underperformed the Sensex's 7.4 per cent gain over the same period. 'One of the bright spots in the market has been the real estate investment trusts (Reits), which outperformed with a 12.2 per cent return, underscoring their growing appeal,' said Vijay Agrawal, managing director, Equirus Capital. 'India's Reit and infrastructure investment trust (InvIT) markets have evolved from niche investments into core components of the country's real estate and infrastructure financing ecosystem.' Since FY20, cumulative fund mobilisations through Reits and InvITs have crossed ₹1.6 lakh crore, driven by their expanding asset base, robust institutional backing, and growing retail investor participation, the report by Equirus said. In the first month of FY26, the sector witnessed four deals worth $372 million, reflecting sustained investor confidence and appetite for real estate as an asset class, according to the report. The four deals featured Eldeco Group ($176 million), DLF Kolkata IT SEZ ($79 million), SAMHI Hotels ($88 million), and Zillion Hotels & Resorts ($29 million). 'This surge in capital raising highlights the sector's resilience, institutionalisation, and long-term growth potential, making it a focus area for PE funds, strategic investors, and capital market stakeholders alike,' added Agrawal.