Despite facing geopolitical issues, high global inflation, and economic recessionary concerns, private equity inflows in India’s real estate sector have shown remarkable resilience. The strength of India’s economic growth has buoyed investor confidence, making the country an attractive destination for both global and domestic institutional investors.

The industrial and logistics sector emerged as the largest beneficiary, securing USD 2.3 billion (around Rs 194 billion), which represented 54% of the total private equity investments in 2024. The sector has gained considerable attention due to its potential as India strengthens its position as a global logistics hub. While the office sector’s share of investment decreased, it continued to demonstrate resilience, aided by the gradual return of employees to workplaces and the increasing demand for office space.

Meanwhile, the residential sector also saw growing interest, particularly in premium housing, driven by rising demand for higher-end properties. Furthermore, emerging sectors such as data centers and life sciences are expected to witness substantial growth in the coming years, providing new avenues for investment.

Looking ahead, Savills India projects that private equity investments in real estate will reach between USD 4.5 billion and USD 5.0 billion in 2025. However, the office segment may see muted investments due to limited availability of investible grade assets. On the other hand, alternative sectors like life sciences and data centers are anticipated to gain prominence, attracting more investment.

Savills India highlighted that the industrial and logistics sector is likely to remain a key focus area for investment as India strengthens its position in global supply chains.

Arvind Nandan, Managing Director of Research and Consulting at Savills India, emphasized the resilience of private equity investments in Indian real estate amidst global uncertainties. He noted that the trends reflect a strategic shift towards diversification, with the industrial and logistics sector leading the way. “While the commercial office segment continues to attract steady interest, the rise in demand for premium housing has also positioned the residential sector as a key investment avenue,” Nandan stated.

As the real estate market continues to evolve, Savills India predicts sustained growth in private equity inflows, with foreign institutional investors maintaining their dominant role.

Savills India, part of Savills Plc., operates in major cities across India, including Bengaluru, Mumbai, Delhi NCR, Chennai, Pune, Hyderabad, Ahmedabad, and Kolkata.

The post Foreign Institutional Investors (FIIs) Drive Growth in Indian Real Estate with 88% Share of Private Equity Investments in 2024: Savills Report appeared first on FolksTimes.

According to the report, “Bank credit growth in 2023-24 was broad-based, led by services sector and personal loans segment, followed by agriculture and industry.” This indicates a diversified credit portfolio by banks, which is crucial for enhancing profitability while managing risks effectively.

One important aspect of the RBI’s report is its reference to the impact of stricter lending norms introduced in November. These regulations have influenced areas like consumer durables, credit card receivables, and loans to non-banking financial companies (NBFCs), where the increase in risk weights resulted in slower credit growth in these segments.

The report also noted a significant change in the share of personal loans and services in total bank credit. At the end of March 2013, personal loans accounted for 17.1% of the total credit, while services held a 21.9% share. By the end of March 2024, personal loans had grown to 32.4%, and services to 27.9%. This shift reflects banks’ growing focus on diversifying their credit portfolios and targeting higher-margin sectors.

On the matter of asset quality, the RBI report highlighted sector-specific variations in the gross non-performing assets (GNPA) ratio. As of September 2024, the agricultural sector recorded the highest GNPA ratio at 6.2%, while the retail loans segment posted the lowest at 1.2%. The industrial sector, in particular, showed significant improvements in asset quality, with its GNPA ratio dropping to 2.9% in September 2024, continuing its positive trend since March 2018.

Additionally, education loans saw a considerable reduction in GNPA ratios, dropping from 5.8% in March 2023 to 2.7% in September 2024. Despite this improvement, education loans still have the highest GNPA ratio among retail loan segments, followed by credit card receivables and consumer durables.

The RBI’s report underlined the importance of risk management and credit diversification as essential strategies for banks to sustain growth and profitability, all while ensuring the stability of the financial system.

The post RBI Report Highlights Personal Loans and Services as Key Drivers of Bank Credit Growth in 2023-24 appeared first on FolksTimes.