According to ANAROCK Research’s AIFs Research Report 2025, the real estate sector has emerged as the top recipient of Alternative Investment Fund (AIF) capital in the first nine months of FY25. Citing SEBI data, the report reveals that real estate attracted Rs 73,903 crore, accounting for 15% of the total Rs 5,06,196 crore invested across all sectors.
This positions real estate ahead of other key sectors such as IT/ITeS, Financial Services, NBFCs, Banks, Pharma, FMCG, Retail, and Renewable Energy, which also saw substantial AIF inflows. The data underscores the growing investor confidence in India’s real estate market, even as challenges such as stalled projects and regulatory bottlenecks persist.
As per the investment distribution across various sectors, Rs 5,06,196 crore has been invested. The "Others" category holds the largest share, amounting to Rs 2,77,970 crore, indicating a significant portion of funds directed towards diverse or unspecified sectors. Among specific industries, real estate has received the highest investment at Rs 73,903 crore, IT/ITeS at Rs 30,279 crore, and financial services at Rs 26,807 crore. Non-Banking Financial Companies (NBFCs) and Banks have attracted Rs 21,929 crore and Rs 21,273 crore respectively. Pharma and FMCG sectors have seen investments of Rs 18,309 crore and Rs 12,743 crore, while Retail and Renewable Energy sectors have drawn Rs 11,550 crore and Rs 11,433 crore, respectively. This distribution strongly emphasises Real Estate and diversified sectors, with substantial interest also observed in technology and financial services.
By the end of 9M FY25, AIF investments in real estate rose from Rs 68,540 Cr by FY 2024-end to Rs 73,903 Cr, an appreciable 8% growth in the first three quarters of the fiscal year 2025. This pace is expected to be sustained and picked up.
The number of AIFS active in the market has grown 36-fold over the past decade, from 42 by 31 March 2013 to 1,524 as of 5 March 2025, with commitment increasing five-fold since 2019. Between FY2013 and FY2025, the commitment raised in AIFs has seen an impressive 83.4% compounded annual growth rate (CAGR). This is a strong testimony to their growing importance in the broader investment landscape.
This surge in commitments is mainly fuelled by Category II AIF, which has contributed almost 80% over the last five fiscal years. Domestic investors continue to hold the majority share in AIF fundraising activities; however, Category II AIFs exhibit a notable balance, with foreign portfolio investors (FPIs) having almost equal participation.
Investment in the real estate sector plays a significant role in the growth of category II AIFs. Key growth drivers include regulatory reforms, a surge in startups, and a greater influx of seasoned investors.
Despite the launch of SWAMIH II with a substantial corpus of Rs 15,000 crore, the fund falls short in addressing the scale of India’s real estate distress, with nearly 2,000 stalled projects still awaiting revival. The resolution process is further hindered by regulatory challenges, particularly insolvency proceedings under the NCLT, which add layers of legal complexity. Moreover, resistance from existing lenders to relinquish the first charge on stressed assets often delays the infusion of new capital. Implementation is also slowed by procedural bottlenecks such as lapsed RERA registrations and pending environmental clearances. Compounding these issues are legal disputes from homebuyers and the withholding of payments due to historical delays, both of which strain project cash flows and complicate timely execution.
