WHAT’S FUELLING CAPITAL IN INDIA

Over $55–60 billion has been poured in India’s real estate sector over the last eight years. Domestic investors are now stepping in with conviction, reshaping the funding landscape. “This shift signals more than market maturity—it reflects a deeper trust in India’s real estate fundamentals. The question now is not whether capital will come, but how it will be deployed, governed, and scaled across a rapidly diversifying ecosystem,” states Vamshi KK Nakirekanti, Sr. Executive Director & Head, Valuation Services, India Head, Consulting and Valuations, Southeast Asia, CBRE. India’s real estate capital landscape may be flush with liquidity, but it’s far from evenly distributed. “Tier 1 developers—armed with balance sheet strength, brand equity, and execution track records—are commanding capital at favourable terms. Meanwhile, Tier 2 and emerging players face uphill battles, often contending with quasi-equity structures and higher coupon demands that erode viability,” expressed Nitin Idnani, Managing Director - Real Estate Advisory, JM Financial Limited.

“AIFs have emerged as a robust channel, with Rs74,000 crore already flowing into the sector. Yet, the path isn’t smooth. Regulatory flip-flops—like restrictions on bank participation in AIFs—have created bottlenecks. The absence of democratized investment vehicles means retail investors are still largely excluded from the real estate story, despite their growing interest,” shared Amit Goenka, Chairman & Managing Director, Nisus Finance Services Co Limited. Beyond the familiar corridors of residential and commercial development, new asset classes—senior living, student housing, data centers, and co-living—are beginning to assert their relevance. As per Srinivasan Gopalan, CEO, Arisinfra Solutions Ltd, while investor interest is growing in other asset classes, the lack of proven operators and scalable models continues to stall institutional participation. Without operational depth and exit visibility, capital remains cautious.”

The gap between capital availability for a Tier 1 and Tier 2 developer is getting larger. Only stronger brands continue to attract all kinds of capital— debt, equity, structured—at much lower cost. Nitin Idnani


Last-Mile Financing

In the vast machinery of India’s real estate sector, last-mile financing is often the missing cog. The SWAMIH Fund, launched in 2019, has helped complete over 50,000 stalled housing units and is on track to deliver 90,000 more. “The nature of real estate—cyclical, complex, and deeply fragmented—means that projects will continue to falter due to regulatory delays, funding gaps, or execution challenges. SWAMIH’s hawkish oversight, rigorous capital deployment, and commitment to homebuyers have earned it industry-wide admiration. But its true value lies in what it represents: a model for institutionalized, socially conscious capital that prioritizes completion over speculation. As the sector matures, India will need more such mechanisms to ensure that development reaches the finish line,” explains Shuvam Pandit, Principal Investment Officer, SWAMIH Fund at SBI Ventures Limited.

Governance and Funding

For developers in India, the capital story is a paradox. There’s more money in the market than ever before—but not everyone can tap into it. While Tier 1 developers with strong balance sheets and listed credentials are courted by investors, Tier 2 players often find themselves navigating unfriendly terms. “Governance has become the new currency of credibility, demanding transparency, discipline, and institutional-grade reporting. Listed developers, backed by corporate governance frameworks, are “spoiled for choice,” while others must evolve or be left behind,” agreed Vimalendra Singh, Chief Business Officer (Residential), Mahindra Lifespaces. “Investors now expect granular visibility into how their capital is being deployed. They want to know not just the projected IRRs, but the actual path to delivery. This shift has elevated governance from a compliance checkbox to a strategic imperative. Developers who can demonstrate control over timelines, cost overruns, and execution risks are far more likely to attract—and retain—capital. For investors, the real return lies in seeing a project delivered on time, on budget, and with integrity,” elaborates Ankur Gupta, Managing Director, Head of Investments – India, Mumbai, Hines India.

Indian real estate has the potential to raise money, but unless we open up our regulatory frameworks for broader participation, we will struggle with a capital deficit. Amit Goenka

India is at that inflection point. What’s interesting to see is the amount of domestic capital now coming into the alternate asset classes like data centers and student housing. Vamshi KK Nakirekanti

The issue isn’t just about availability—it’s about the nature of capital. What’s presented as equity often behaves like debt, with limited flexibility, that’s a hindrance, especially for Tier 2 developers. Vimalendra Singh

Execution is the key. Without scale and operators, institutional capital won’t get attracted as liquidity and exit options are the biggest concerns. Ankur Gupta

From land acquisition to handover, a developer deals with 500–600 touch points and to maintain inves to’sr confidence, transparency across multiple touchpoints is critical. Srinivasan Gopalan

SWAMIH is not a stopgap arrangement. It is an insti tutionalized fund and a crucial government effort to save stalled housing projects and provide much-needed bailouts to home buyers. — Shuvam Pandit