India’s real estate sector experienced a notable surge in the September 2024 quarter, with 25 deals totaling USD 1.4 billion, as per Grant Thornton Bharat’s report, “Real Estate/REITs Dealtracker – Providing M&A and PE Deal Insights.” This marked a record high in deal volumes and the second-largest deal value since Q2 2023.
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In the September quarter of 2024, India’s real estate sector recorded a significant upswing, with 25 deals worth USD 1.4 billion, according to Grant Thornton Bharat’s report titled “Real Estate/REITs Dealtracker – Providing M&A and PE Deal Insights.” This represents an all-time high in terms of deal volumes and the second-highest in deal values since Q2 2023.
The surge in deal values was largely driven by Qualified Institutional Placements (QIP) initiated by developers, signaling increased confidence in the sector’s growth potential. Private equity (PE) funding, while experiencing a decline in value compared to the previous quarter, remained a key component, particularly in residential and commercial real estate segments. Additionally, the technology arm of real estate saw increased activity, further diversifying the landscape.
Breaking down the numbers, eight merger and acquisition (M&A) deals worth USD 51 million were reported during the quarter. Meanwhile, the PE/VC (Private Equity/Venture Capital) space saw 12 deals totaling USD 401 million. Despite a sharp drop from USD 1.4 billion in PE funding in Q2 to USD 0.4 billion in Q3, the number of deals remained consistent, indicating that while the size of the investments may have shrunk, investor interest in smaller, focused ventures held strong.
The capital market also saw considerable activity, with one initial public offering (IPO) raising USD 49 million and four QIPs amounting to a massive USD 940 million. The standout transaction was Prestige Estates raising USD 602 million through a QIP, contributing to the six-fold rise in QIP value from Q2 to Q3.
According to Shabala Shinde, Partner and Real Estate Leader at Grant Thornton Bharat, this increase in QIP activity points to growing confidence in real estate firms’ ability to raise funds through public markets. However, she cautioned that recent volatility in the Sensex and broader capital markets might dampen investor enthusiasm in the near term, though expectations for Q4 remain optimistic.
As India’s real estate market continues to evolve, QIP and PE funding remain critical in fueling growth, especially in residential and commercial developments. However, the fluctuating market dynamics suggest that the sector must remain agile and responsive to capital market trends as it heads into the final quarter of the year.
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