Private capital bets big on India’s land

Hello,

Here’s what’s new in Indian M&A this week.

Fantasy sports platform Dream Sports is stepping up its game with a $50 million infusion into Cricbuzz and Willow TV, as the group pushes into digital sports media. 

New-York based Bat VC, co-founded by the former head of X India, is chasing breakthroughs with a $100 million AI-focused fund. 

In telecoms, Singaporean conglomerate, Singtel, quietly exited 1.2% of Bharti Airtel for $1.54 billion, one of the largest block trades this year. 

And finally, rumour has it that industrial heavyweight Sajjan Jindal’s family trust is putting ₹1,200 crore of JSW Infrastructure on the block to meet new minimum public shareholding rules. 

I hope you enjoy this week’s roundup, and please do connect with me on LinkedIn to find out how I can help with your next M&A deal.

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Regulator lures quality capital to make land a more liquid asset

Indians have a near-neurotic love for owning land for legacy and permanence. Take pioneering angel investor, the late Rakesh Jhunjhunwala, who famously bought up luxury apartments in South Mumbai’s Malabar Hills, only to tear them down to construct a 14-storey family abode. 

Among the priciest real estate in the world, the neighbourhood boasts ex-residents like Jinnah and Jardine (the father of the nation of Pakistan and the cricketer who captained England during the Bodyline tour) and current resident, Radhakishan Damani, industrialist, who spent more than ₹1,001 crore ($122 million) buying a 90-year old bungalow there in 2021.

However, Delhi NCR outperformed Mumbai last year, achieving the largest number of land deals of all the Indian Metropolitan cities. Overall 95 out of 133 major transactions — i.e. either deals of scale over 10 acres or with a consideration north of ₹100 crore — were residential projects, nearly 1,950 acres, dwarfing industrial, mixed-use and healthcare developments combined. 

Courtesy: Business Standard

This comes as regulators have helped reframe land from a sentimental heirloom to a liquid asset, and mindsets from scarcity to abundance, especially as REITs and InVits (Infrastructure Investment Trusts) gain popularity.

American alternative investment manager Blackstone led the charge: it paid $2.84 billion in 2014 for real estate developer Embassy’s logistics and office parks, and another $890 million for property developer Prestige Group’s Bengaluru office portfolio in 2018. 

Making land more tradeable

In March, SEBI relaxed lock-in rules for real estate and infrastructure trusts to boost long-term institutional inflows and deepen private capital participation. The changes will also facilitate follow-on public offers, and are part of a broader strategy to align real estate more closely with private capital markets. While no REIT or InvIT has yet taken advantage of the new rules, the regulatory shift signals intent: the government wants land assets to be more tradeable.

This is especially important as institutional interest in India’s built environment grows. American commercial real estate services and investment firm CBRE’s data shows transaction activity in the first nine months of 2024 was led by logistics (39%), engineering & manufacturing (19%) and retail (11%) — all sectors that depend heavily on land and infrastructure. 

Meanwhile, equity investments in Indian real estate climbed from $5.9 billion in 2021 to $7.8 billion in 2022, before settling at $7.4 billion in 2023. Most of this was in development sites and land.

Recognising real estate’s multiplier effect, policymakers are keen to attract high quality and long term capital, stabilising the sector and spurring growth in the wider economy. The belief is that stable funding can drive growth in healthcare, education, transport, and scientific research — all of which require land and infrastructure.

A risky investment?

And yet, this optimism exists alongside risk. A December 2024 EY survey of fund managers ranked real estate as the riskiest sector for defaults. The reasons are structural: delays in approvals, regulatory inconsistencies across the different Indian states, etc. 

M&A will play a key role in this next phase. Large funds will stitch together land parcels and package stressed assets into portfolios. All parties from crossover and strategic investors, including global funds, to domestic corporates and tech-aligned capital will increasingly back turnkey, or move-in ready, developments. 

Soon real estate in India will be less about legacy and more about liquidity.