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India's real estate sector witnessed extraordinary growth last week, with capital mobilisation jumping more than threefold in FY25, climbing from INR 109,554 million to INR 328,526 million, driven by 17 major transactions. Large-cap firms topped the charts in fundraising, followed by REITs, mid-caps, and small-caps. Notably, REITs generated around 17.9% returns, outperforming both the Sensex and realty equities. Over the longer term since 2021, smaller real estate players have outshone their bigger counterparts and benchmark indices a testament to rising investor confidence across segments.
India's real estate sector has clocked a massive leap in capital mobilisation, with FY25 recording a total fundraising of INR 328,526 million more than three times the INR 109,554 million raised in the previous financial year. The number of capital deals also saw a significant jump, growing from five to 17, indicating deeper investor activity and broader interest across the board, as per a detailed Equirus Capital report. Advertisement
Large-cap realty companies dominated the capital inflow charts, raising INR 393,898 million, while REITs followed closely with INR 312,012 million. Small- and mid-cap developers raised INR 66,938 million and INR 52,626 million respectively, showing that capital was flowing across segments and not just limited to the top-tier players.
Interestingly, despite a tough equity market for developers, REITs delivered standout performance, clocking a return of 17.9% over the past year well ahead of the Sensex, which posted a 6.1% gain during the same period. In contrast, listed large-, mid-, and small-cap realty stocks witnessed declines, highlighting the growing appeal of REITs as a relatively stable and income-generating investment route.
When looking at performance from March 2021 to June 2025, small-cap real estate firms delivered the strongest returns within the sector, even outpacing the Sensex and REITs. Mid-caps also recorded impressive gains during this period, suggesting that investors are increasingly betting on emerging and agile developers rather than just the established giants.
The surge in FY25 was also driven by a sharp uptick in private equity and M&A deals. According to additional industry reports, 17 large-scale transactions played a critical role in pushing capital flows past INR 328,000 million. This includes deals involving commercial real estate, mixed-use developments, and hospitality assets, indicating broad-based demand across asset classes. Institutional participation has grown steadily, marking a notable shift toward more structured and long-term investments in the space.
In fact, recent deals hint at a strong start to FY26 as well. Developers like Eldeco Group, DLF (for its Kolkata IT SEZ), and hospitality chains such as SAMHI Hotels and Zillion Hotels & Resorts have already attracted significant capital. This early momentum underscores the confidence investors continue to place in Indian real estate, especially as asset classes diversify beyond residential into offices, data centres, logistics, and hotels.
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