After five sluggish years, FDI is returning to India India-specific cumulative fund raising has begun to pick up after post-global financial crisis, says Shobit Agarwal, MD – Capital Markets, JLL India.
India-specific cumulative fund raising attained its peak in the pre-global financial crisis (GFC) period. During 2005 and 2008, there were 50 such funds that raised $16 billion in total. However, post-global financial crisis, only 29 funds got raised in five years, with cumulative fundraising of $3.9 billion, he said.
“During the pre-GFC phase, 82 per cent of funds got raised in US Dollar. This got reduced to 57 per cent in post-GFC phase. From 2004 onwards the contribution has increased considerably to 70 per cent hinting that the positivity is here to stay for some time,” Agarwal, told ETRealty.
The cycle started gaining momentum again just before the 2014 general elections. So far $2.2 billion has been raised in the current investment cycle reflecting a definite rise in confidence on Indian real estate.
Not only has the volume of investment increased, there has also been an increase in the average ticket size from $134 million to $184 million. If investment done in US Dollar alone is considered, the average ticket size has gone up from $159 billion in 2009-13 to $388 billion in the ongoing phase that started in 2014.