India’s Real Estate Sector Raises Rs 17,867 Crore via Capital Markets in FY26 YTD

India’s real estate sector has entered FY26 on a strong footing, raising ₹17,867 crore through capital markets during the April–December period. With deal activity already matching last year’s full tally, the pace of fundraising signals sustained investor confidence and positions FY26 as one of the strongest years for real estate capital market activity in recent times.

Data released by investment banking firm Equirus Capital highlights that multiple fundraising avenues including IPOs, REIT issuances, QIPs, and rights issues, have remained active, underlining the sector’s growing institutionalisation.

Capital Market Activity Signals Strong Momentum for India’s Real Estate Sector

In the first nine months of FY26, India’s real estate sector completed 11 capital market transactions, equalling the total number of deals executed in the entire FY25. Both the volume of capital raised and the pace of deal closures suggest that FY26 could surpass recent highs, making it the most active year for the sector in nearly six years.

This momentum reflects a broader shift in how real estate companies fund growth, with increasing reliance on transparent, market-linked instruments rather than traditional debt-heavy structures.

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Breakdown of Capital Raised: IPOs, REITs, QIPs and Rights Issues

The ₹17,867 crore raised so far in FY26 has come through a diversified mix of capital market routes. IPOs and qualified institutional placements have enabled listed developers to strengthen balance sheets, while REITs continue to act as a key channel for monetising income-generating assets.

Rights issues have also played a role, allowing existing shareholders to participate in growth plans without significant dilution. This diversified fundraising profile reflects the maturity India’s real estate sector has achieved over the past decade.

Since FY18, cumulative capital raised by the sector stands at ₹72,331 crore, highlighting the long-term trend of increasing market participation.

REITs and Listed Developers Dominate Fundraising Landscape

Among all fundraising routes, REITs have emerged as the largest beneficiaries. Since FY18, REIT issuances have accounted for ₹31,241 crore, reflecting strong institutional appetite for stable, yield-generating commercial assets.

Large-cap real estate companies follow closely, having raised ₹20,437 crore over the same period. These developers have benefited from improved governance standards, scale advantages, and access to lower-cost capital.

Mid-cap and small-cap players are also increasingly tapping the markets, collectively raising over ₹20,000 crore since FY18. This trend indicates a broad-based strengthening of India’s real estate sector across company sizes.

Why Housing Affordability Is Supporting Capital Inflows

One of the key structural drivers behind rising capital market activity is improving housing affordability. According to Equirus Capital, affordability levels in India are currently the most favourable they have been in nearly three decades.

The property price-to-annual income ratio, which stood at around 22 in 1995, has steadily declined to approximately 3.3 by 2024. This sharp improvement reflects rising incomes, controlled price growth, and stable financing conditions.

Home loan interest rates and rental yields have remained largely steady since FY21, offering predictability for both homebuyers and investors. Going forward, the gap between lending rates and rental yields is expected to narrow further in FY26, potentially falling below 500 basis points and providing additional support to housing demand.

India’s Real Estate Sector Emerges as Preferred Asset Class

Supported by lifestyle upgrades, urbanisation, income growth, and favourable demographics, India’s real estate sector has emerged as one of the most preferred asset classes in recent periods.

In the first half of 2025, real estate ranked high among investor preferences, benefiting from its dual appeal as both a consumption-driven and investment-oriented asset. Unlike volatile financial instruments, real estate continues to offer tangible value, long-term appreciation, and rental income potential.

These characteristics have played a crucial role in sustaining capital inflows, even amid periods of global economic uncertainty.

Demand–Supply Balance Strengthens Market Fundamentals

A notable positive trend across India’s real estate sector is the healthy balance between demand and new supply. Over the past few years, residential absorption levels have consistently matched or exceeded fresh launches, preventing inventory overhang.

In the top seven cities, steady sales momentum has been supported by calibrated new project launches. This equilibrium has helped maintain pricing discipline while improving developer confidence.

Controlled supply, combined with strong end-user demand, has strengthened the sector’s fundamentals and made it more attractive to long-term institutional capital.

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What the Capital Market Trends Mean for Developers and Investors

For developers, active capital markets translate into greater financial flexibility, reduced dependence on high-cost borrowing, and the ability to scale projects responsibly. Stronger balance sheets also allow developers to focus on quality, timely delivery, and asset consolidation.

For investors, the increasing participation of REITs and listed players enhances transparency, governance standards, and exit visibility. As India’s real estate sector becomes more institutionalised, it aligns more closely with global investment benchmarks.

Outlook

Looking ahead, Equirus Capital expects the outlook for India’s real estate sector to remain constructive. Key support pillars include robust affordability metrics, sustained end-user demand, and expanding institutional capital participation.

With capital markets, REITs, and listed platforms playing a growing role in funding, the sector appears well-equipped to sustain its growth trajectory. As long as macroeconomic stability and consumption trends remain intact, real estate is likely to retain its position as a core asset class in India’s investment landscape.