India's Real Estate Sector: A Post-Pandemic Boom with IPOs and Improved Credit Ratings
India's real estate sector is experiencing unprecedented growth, driven by a wave of credit rating upgrades, booming IPO activities, and healthier balance sheets in the post-pandemic era, as outlined in a recent report by Colliers India. The industry has outperformed other major sectors in critical credit and financial metrics.
The report highlights that since 2021, the real estate sector has raised nearly Rs 400 billion through IPOs, with Rs 76 billion from seven listings in 2025 alone. A robust V-shaped post-COVID recovery, alongside reforms like RERA and GST, has enhanced transparency and resilience. Gross bank credit to real estate has doubled from Rs 17.8 lakh crore in FY 2021 to Rs 35.4 lakh crore by FY 2025, accounting for nearly 20% of total bank credit in India. Notably, NPAs in construction loans have plummeted from 23.5% in 2021 to just 3.1% in 2025, indicating improved credit quality.
The top 50 listed real estate companies have shown significant gains in profitability and leverage. In FY 2025, 62% achieved net profit margins above 10%, a substantial rise from 23% in FY 2021. Similarly, 62% had debt-to-equity ratios below 0.5, reflecting aggressive deleveraging measures. Despite external volatilities, 'the Indian real estate sector demonstrates resilience and financial prudence,' according to Badal Yagnik, CEO of Colliers India.
Beyond traditional residential and commercial offerings, IPO activity is expanding into sectors such as flex spaces and hospitality. The market anticipates growth in REITs and SM-REITs, providing retail investors with broader market access. 'Diverse listings in flex spaces, hospitality, and other segments alongside the anticipated REIT upswing promise well for the sector, showing long-term stability and growing investor confidence amidst global uncertainties,' stated Vimal Nadar, National Director at Colliers.
With favorable demographics, steady urban demand, and increasing disposable incomes, the outlook for the real estate sector remains positive. However, developers should remain cautious of interest rate risks and regulatory challenges.
