Real Estate Dominates AIF Net Investments with INR 73,903 Cr Infusions
till 9M FY25
· INR 5,06,196 crore
AIF (Alternate Investment Funds) net investments made till 9M FY2025 across
various sectors; real estate comprised highest share at 15%
· FY2019 - 9MFY 2025,
AIF sector maintained a CAGR of approx. 26%
· AIFs’ overall
commitment across Indian sectors rose from INR 2,82,148 Cr in FY 2019 to INR
13,05,179 Cr in 9M FY2025
· Surge in AIF
activity largely driven by Category II AIFs with a mix of Real Estate Funds,
Private Equity, Debt Funds, & Fund of Funds (FoF)
· In the last five
fiscal years, Category II AIFs accounted for approx. 80% of total AIF
commitments
· Since inception,
SWAMIH Fund has injected INR 35,000+ crore in liquidity to revive stuck
projects
· AIF-backed
investments directly impact real estate-linked industries like cement, steel
& construction labour
Mumbai, 21 April 2025: The rise of Alternate
Investment Funds (AIFs) has significantly transformed real estate financing in
India, offering a crucial lifeline to projects struggling with lack of funding
and unlocking new opportunities for developers. AIFs - privately pooled funds
that invest in non-traditional assets like private equity, hedge funds, and
real estate - offer niche, high-risk, high-reward opportunities suited for
experienced investors.
In its AIFs Research Report 2025,
ANAROCK Research has compiled SEBI data which indicates that till 9M FY25, the
real estate sector accounted for the largest share (15%) of cumulative net AIF
investments, with INR 73,903 crore invested in real estate out of an
all-sectors total of INR 5,06,196 crore. Other sectors benefiting from AIF
investments include IT/ITeS, Financial Services, NBFCs, Banks, Pharma, FMCG,
Retail, Renewable Energy, and others.
|
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)
By the end of 9M FY25, AIF investments in real estate rose from INR
68,540 Cr by FY 2024-end to INR 73,903 Cr - an appreciable 8% growth in first
three quarters of fiscal year 2025. This pace is expected to sustain and pick
up.
Prashant Thakur, Regional Director & Head – Research, ANAROCK Group, says, “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 maximize the impact of AIFs further."
Commitments Surge
The number of AIF active in the market has grown 36-fold over the past
decade - from 42 by 31st March 2013 to a 1,524 AIFs as of 5th March 2025, with
commitment raised increasing five-fold since 2019. Between FY2013 and FY2025,
the commitment raised in AIFs has seen an impressive 83.4% compounded annual
growth rate (CAGR). This is a strong testimony to their growing importance in
the broader investment landscape.
Source: SEBI & ANAROCK Research
This surge in commitments is mainly fuelled by Category II AIF, which is
contributing almost 80% 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 an almost equal participation.
Investment into the real estate sector play a significant role in growth
of category II AIFs. Regulatory reforms, a surge in startups, and a greater
influx of seasoned investors are key growth drivers.
SWAMIH Sets the Pace
“The SWAMIH Fund, India's flagship AIF and arguably the most prominent,
has helped revive numerous stalled projects with liquidity infusions of over
INR 35,000 crore to date,” says Anuj Puri, Chairman – ANAROCK Group.
“By facilitating the completion of many thousands of housing units, SWAMIH Fund
has been an unmitigated boon for homebuyers across the country and helped bring
considerable stability to the real estate market. That said, the SWAMIH Fund
fights a constant uphill battle against various impediments.”
SWAMIH – The Challenges:
· Though substantial,
the INR 15,000 crore corpus through SWAMIH II is not enough to revive India’s
close to 2,000 stalled projects
· Regulatory hurdles,
including insolvency cases under NCLT, further complicate the projects revival
process
· 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
"The SWAMIH Fund's encumbered journey underscores that addressing
India’s stalled housing crisis requires more than just capital — it demands
systemic reform," says Puri. "Overcoming entrenched bottlenecks like
regulatory delays, lender resistance, and cash flow constraints is key to
unlocking its full potential. 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."
Download ANAROCK AIFs Research Report 2025
