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India’s real estate sector is riding a wave of renewed investor confidence, raising the highest capital in seven years, according to a new report by Mumbai-based investment banking firm Equirus Capital. The sector raised an impressive Rs. 23,080 crore through 12 deals, signaling a sharp rebound in institutional and market interest after years of cautious optimism.
The report highlights that since FY18, the total capital raised by the real estate sector has reached Rs. 72,331 crore. Within this, Real Estate Investment Trusts (REITs) accounted for the largest share at Rs. 31,241 crore. Large-cap real estate companies raised Rs. 20,437 crore, mid-cap players collected Rs. 12,496 crore, and small-cap companies brought in Rs. 8,156 crore. The numbers underline how diversified funding has become, spanning across the corporate spectrum, from institutional-grade developers to emerging realty firms.
Capital Confidence Returns to Realty
The capital inflow is more than just a financial statistic, it marks a shift in sentiment. After years of consolidation, India’s real estate landscape is witnessing increased participation from both domestic and global investors. The 7-year high in fund mobilization suggests that confidence in India’s long-term real estate growth story is back, supported by improving market fundamentals, rising housing demand, and an active capital market environment.
Developers are using these funds to strengthen balance sheets, complete ongoing projects, and expand into emerging micro-markets. The influx also reflects the growing acceptance of structured real estate products such as REITs and Infrastructure Investment Trusts (InvITs), which have opened new avenues for both institutional and retail investors.
Sectoral Performance: Small-Cap Stocks Lead the Charge
While large-cap realty companies have traditionally dominated market share, the Equirus Capital report notes an interesting trend: small-cap real estate stocks have outperformed every other category since March 2021. They were followed by mid-cap stocks, while large-cap firms lagged behind in terms of returns.
This pattern highlights how smaller developers and regional players are benefiting from focused project portfolios and nimble business models. Many of these companies have tapped into India’s Tier 2 and Tier 3 cities, where demand for housing and commercial spaces is growing steadily, driven by infrastructure upgrades and affordable housing schemes.
REITs: The Silent Performer
Despite their slower equity market performance over the past few years, REITs have emerged as strong wealth creators in the recent 12-month period. According to the report, REITs have delivered the highest returns among all real estate asset classes—clocking an impressive 21.3% gain.
In contrast, large-, mid-, and small-cap real estate stocks posted negative returns during the same period. The turnaround in REIT performance underscores their resilience and the growing investor appetite for income-generating, professionally managed real estate assets. With India now home to multiple listed REITs covering office, retail, and diversified portfolios, the segment is maturing rapidly and attracting long-term institutional capital.
The Road Ahead
Equirus Capital’s findings present a clear picture: India’s real estate sector is once again on investors’ radar. The capital raised, combined with shifting market preferences, indicates a period of steady, fundamentals-driven growth ahead.
As developers continue to deleverage and align with evolving demand, especially in housing, commercial, and mixed-use segments, the sector’s ability to attract sustained funding looks stronger than ever. Whether through REITs or equity markets, the return of capital confidence is setting the stage for India’s next chapter in real estate growth.
