Real estate companies fund-raise ammo to fuel growth
Subscribe to enjoy similar stories. Residential real estate companies are amping up for the next leg of growth by strengthening their financial positions. To meet expansion needs, many listed grade A realtors are garnering funds.
Lately, the qualified institutional placement (QIP) route has emerged as the most preferred choice among developers. For instance, Godrej Properties Ltd raised about ₹6,000 crore through the QIP route, followed by Prestige Estates Projects Ltd ( ₹5,000 crore), Macrotech Developers Ltd ( ₹3,300 crore) and Brigade Enterprises Ltd ( ₹1,500 crore). In fact, the real estate sector contributed 16% to the overall QIP fundraising in 2024 compared to nil in 2023, according to recent research conducted by Anarock Property Consultants.
This time, eight residential developers and onereal estate investment trust (Reit) collectively raised a total of ₹22,320 crore, Anarock said. Sobha Ltd and Ajmera Realty Ltd were exceptions to the QIP trend, raising funds via rights issues and preference shares, respectively. In recent quarters, healthy internal accruals have helped realty companies get a grip on their debt levels, significantly reducing leverage.
This has helped investor sentiment at a time when a muted first half of FY25 (H1FY25), where delayed approvals hampered new launches, hurt pre-sales growth. Read more: Lodha, Godrej Properties may gain from traction in Mumbai Metropolitan Region According to Antique Stock Broking, the aggregate net debt of 11 realty companies under its coverage eased by 40% year-on-year in the December quarter (Q3FY25). However, what matters the most for real estate stocks and earnings estimates is business development activities and the pace at which it translates into pre-sales
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