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India's real estate sector is witnessing a significant rise in credit rating, booming IPO activity, and healthier balance sheets in the post-pandemic era, according to a report by Colliers India.
The country's real estate industry has outperformed major industries in terms of critical credit and financial metrics, it said. The report further reveals that, since 2021, the sector has raised nearly Rs 400 billion through IPOs, including Rs 76 billion from seven listings in 2025 alone. A strong V-shaped recovery post-COVID, coupled with structural reforms like RERA and GST, has made the sector more transparent and resilient. Additionally, gross bank credit to real estate has doubled from Rs 17.8 lakh crore in Financial Year (FY) 2021 to Rs 35.4 lakh crore by FY 2025, now representing nearly 20 per cent of total bank credit in India. While Non-Performing Assets (NPAs) in construction loans have fallen dramatically--from 23.5 per cent in 2021 to just 3.1 per cent in 2025--reflecting improved credit quality. The top 50 listed real estate firms have shown marked improvements in profitability and leverage. In FY 2025, 62 per cent had net profit margins above 10 per cent, up from 23 per cent in FY 2021. Similarly, 62 per cent had debt-to-equity ratios under 0.5, indicating aggressive deleveraging. "Indian real estate sector continues to demonstrate resilience and financial prudence even in the wake of external volatilities. In fact, the strong financial health of the sector is demonstrated by a significantly higher proportion of credit rating upgrades during FY 2025 as compared to upward revisions in other economic sectors," said Badal Yagnik, CEO, Colliers India. Beyond traditional residential and commercial segments, IPO activity is expanding into flex spaces and hospitality. The market also anticipates a rise in REITs (Real estate investment trusts) and SM-REITs, offering retail investors broader access to the property market. "Moreover, the diverse listings across segments such as flex spaces, hospitality, office, residential, etc., and the anticipated upswing in SM REIT and REIT activity is promising for the entire real estate sector. Indian real estate continues to draw strength from long-term stability and growing investor confidence, making it less vulnerable to global uncertainties," said Vimal Nadar, National Director at Colliers, noted. With favourable demographics, steady urban demand, and rising disposable incomes, the real estate sector's outlook remains bullish. However, developers must stay vigilant of interest rate risks and regulatory bottlenecks. (ANI)
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