Fundraising via qualified institutional placements (QIPs) has hit a record high in 2024, crossing the ₹1 lakh crore mark for the first time ever in a calendar year on the back of favourable stock market conditions and higher valuations, which prompted big-ticket launches by large corporates, especially from real estate space. The value of funds raised through QIPs jumped 150% as compared to the previous year and the number of deals more than doubled from the last year.

In the calendar year 2024, 99 QIP issues raised ₹1,41,482 crore, which was 75% higher than the previous all-time high of ₹80,816 crore in 2020. In 2023, a total of 43 QIP issues garnered ₹55,109 crore across sectors.

Why do corporates take the QIP fundraising route? Because it is one of the preferred fundraising mechanisms where a company issues new shares to a select group of investors at a discount to the prevailing market rate. It is a faster and more cost-effective way for firms to raise capital than private equity and bank loans, offering liquidity without excessive shareholder dilution and preserves ownership structures while enabling larger projects and investments.

Real Estate sector tops chart

Sector wise, real estate was a dominant contributor with 8 developers and 1 Real Estate Investment Trust (REIT) collectively raising record ₹22,320 crore, amounting to 16% total fundraising. The list includes Anant Raj, Macrotech Developers, D B Realty, Keystone Realtors, Max Estates, Brigade Enterprises, Prestige Estate Project, Godrej Properties, and Brookfield India REIT. Of the past 11 years, 2024 saw the highest-ever QIP fundraising, including for the real estate sector, as per the report.

“The surge in QIP fundraising in 2024 highlights the real estate sector's continued might amid strong institutional confidence in India’s economic fundamentals. Despite market fluctuations, capital markets remain robust, and companies continue to attract strategic investments,” says Anuj Puri, Chairman - ANAROCK Group.

“Our research shows that the real estate sector remained a dominant contributor in 2024, with eight developers and one REIT collectively raising a total of ₹22,320 crore. In short, robust financial positioning supports the massive influx of upcoming real estate developments,” he adds.

The report showed that the real estate sector, including developers and REITs, ranked first in QIP fundraising both in terms of capital raised and the number of issues. "Notably, we saw twice the number of QIP issues in 2024 than in the previous year. This sets a record for the highest number of issues in a single year. Institutional investors remain extremely bullish on the real estate sector's growth potential," says Puri.

In 2023, the real estate fundraising trend through QIPs was nil, meaning that realty players did not raise any funds via this route that year.

Mixed outlook amid turbulence in stock market

The recent turbulence in the Indian stock market, leading to steep corrections, have left investors wary. While retail and short-term investors react to volatility with caution, institutional investors have been doubling down on long-term growth opportunities in Indian real estate, reveals the report.

"The overall volatility, particularly in H2 2024, suggests a mixed outlook for QIP funding in the real estate sector in 2025," says Puri. "While tightening fiscal policies and global uncertainties may temper broader equity market sentiment, the strong performance of the Real Estate index despite volatility is a testament to sustained investor interest in the realty sector."

Given that QIPs are driven by institutional investor confidence, there are strong indications that large and listed developers will continue to draw significant funding in 2025. Investors seeking stability amid broader market fluctuations will see real estate as a good hedge against volatility. Also, if global monetary policies stabilise and domestic economic indicators remain positive, QIP activity in Indian real estate will gain further momentum and continue to fuel expansion, land acquisitions, and debt refinancing among these players, says ANAROCK Group chairman.

(DISCLAIMER: The views and opinions expressed by investment experts on fortuneindia.com are either their own or of their organisations, but not necessarily that of fortuneindia.com and its editorial team. Readers are advised to consult certified experts before taking investment decisions.)