India’s real estate sector has staged a dramatic revival in FY25, with both capital raised and deal-making activity recording over threefold growth compared to the previous year, according to a new report released by financial services firm Equirus Capital.
As per Equirus, real estate companies collectively raised Rs 3,28,526 million in FY25, a sharp leap from Rs 1,09,554 million in FY24. Simultaneously, the number of deals surged from just 5 in the prior year to 17 this fiscal.
“The strong momentum in capital markets and the continued confidence of investors in the long-term fundamentals of India’s property sector have driven this robust capital inflow,” Equirus Capital stated in its press note.
The bulk of the fundraising came from large-cap real estate companies, which raised a staggering Rs 3,93,898 million. Real Estate Investment Trusts (REITs) followed closely, mobilising Rs 3,12,012 million during the period. The small-cap segment attracted capital worth ₹66,938 million, while mid-cap real estate firms raised Rs 52,626 million.
REITs outperform Sensex
Interestingly, while many listed real estate players faced challenging market conditions over the past year, REITs emerged as the standout performers. The report highlights that REITs delivered a return of 17.9% in the 12 months leading up to June 23, 2025. This return significantly outpaced the benchmark Sensex, which posted a relatively modest gain of 6.1% during the same period.
In contrast, returns for large-cap, mid-cap, and small-cap real estate companies remained in negative territory over the past year, reflecting lingering challenges in certain segments of the market despite broader capital inflows.
“Investors have gravitated towards REITs as a safer avenue within the real estate space, attracted by their income-generating capability and the relative stability they offer amidst market volatility,” noted Equirus Capital.
Small-Cap segment
While short-term returns have been mixed, the longer-term picture tells a more nuanced story. Equirus Capital pointed out that over the past four years, the small-cap segment has been the best-performing category within the real estate sector, outperforming not only larger real estate companies but also REITs and the broader Sensex index.
“The small-cap real estate space has delivered impressive returns since March 2021, benefitting from targeted development projects, regional demand, and investor interest in emerging real estate opportunities,” Equirus explained. Mid-cap players also posted solid gains over this extended period, positioning themselves as a key growth area for investors looking beyond large-cap names.
The significant uptick in capital raising and deal activity underscores the renewed confidence in India’s real estate sector, despite global macroeconomic uncertainties and domestic market fluctuations. Industry observers suggest that robust fundraising and active deal-making could fuel new development projects, drive consolidation in the sector, and pave the way for further innovation in financing and asset monetization.
Equirus Capital, which has facilitated over 295 transactions across various financial products, remains optimistic about the continued growth of India’s property market. With more than $13 billion raised across sectors over the last 17 years, the firm underscores the importance of tailored solutions to meet evolving investor and industry demands.
As India’s economy continues to expand and urbanization trends accelerate, the real estate sector appears poised for sustained momentum—provided market participants navigate challenges and capitalize on emerging opportunities.
