Realty leads AIF investments with Rs 73,903 cr infusions till 9MFY25: Rpt

Investments in real estate through AIFs rose by 8 per cent from Rs 68,540 crore at the end of March 2024 (FY24-end) to Rs 73,903 crore by December 2024

India’s real estate space received 15 per cent of cumulative net AIF investments during the first three quarters of the financial year 2024-25 (9MFY25), which, at ₹73,903 crore, was the highest among all sectors during the period.

 

The Alternate Investment Funds (AIFs) invested ₹5.06 trillion across all sectors during the first nine months of FY25, an Anarock report said.

 

AIFs invested ₹30,279 crore in IT/ITeS, ₹26,807 crore in financial services, ₹21,929 crore in NBFCs, ₹21,273 crore in banks, ₹18,309 crore in pharma, ₹12,743 crore in FMCG, ₹11,550 crore in retail and ₹11,433 crore in the renewable energy sector.

   

AIF investments in real estate rose by 8 per cent from ₹68,540 crore as of March 2024 or FY24-end to ₹73,903 crore by December 2024 end. 

 

AIFs are privately pooled funds that invest in non-traditional assets like private equity, hedge funds, and real estate. They offer niche, high-risk, high-reward opportunities suited for experienced investors.

 

These funds offer crucial support to the projects struggling with a lack of funding.

 

Prashant Thakur, regional director & head of research, Anarock Group, said, “Amidst increasing constraints on traditional funding sources, AIFs are an agile and innovative financing mechanism to address capital gaps at various stages of real estate development. Since they pool capital from domestic and foreign investors, AIFs are a sustainable and scalable funding ecosystem. Going forward, the adoption of blended finance models, AI-driven risk assessments, and streamlined regulatory frameworks maximise the impact of AIFs further.”

 

According to the report, the number of AIFs active in the market has grown 36-fold over the past decade, from 42 in 31st March 2013 to 1,524 as of 5th March 2025, with commitments raised increasing five-fold since 2019.

 

Between financial year 2012-13 (FY13) and FY2024-25, the commitment raised in AIFs has seen an impressive 83.4 per cent compounded annual growth rate (CAGR). 

 

This surge in commitments is mainly fuelled by Category II AIF, which is contributing almost 80 per cent over the last five fiscal years.

 

Domestic investors continue to hold the majority share in AIF fundraising activities. However, Category II AIFs exhibit a notable balance, with foreign portfolio investors (FPIs) having almost equal participation.

 

Anu Puri, chairman, Anarock Group, the SWAMIH Fund, said that India’s flagship AIF, has helped revive numerous stalled projects with liquidity infusions of over ₹35,000 crore to date.

 

However, the ₹15,000 crore corpus through SWAMIH II is not enough to revive India’s close to 2,000 stalled projects, as the regulatory hurdles, including insolvency cases under NCLT, further complicate the projects’ revival process, the report stated. 

 

Moreover, existing lenders often resist ceding the first charge on stressed assets, delaying financing.

 

Approval bottlenecks, such as expired RERA registrations and environmental clearances, add to implementation delays. Homebuyer litigations and withheld payments due to past delays create cash flow constraints, making execution more complex.

 

“If these challenges are tackled head-on, the Fund can truly bridge the gap between promise and execution on its mission to rescue homebuyers who have no other recourse,” Puri added. 

         

Sectors	Amt.Invested (INR CR)
Real Estate	73,903
IT/ITeS	30,279
Fin Services	26,807
NBFCs	21,929
Banks	21,273
Pharma	18,309
FMCG	12,743
Retail	11,550
Renewable Energy	11,433
Others	2,77,970
Total	5,06,196

  Source: Sebi & ANAROCK Research (cumulative net investment made across sectors till 9M FY25)