Real Estate Blues: Why 11 Key Indian Developers Are Down 5-38% YTD in 2025 Amid Market Headwinds

  The Indian real estate sector, often hailed as a cornerstone of economic growth, is facing a turbulent 2025. Contributing around 7% to the nation's GDP, the industry was projected to expand to $1 trillion by 2030, fueled by urbanization and infrastructure booms. Yet, halfway through the year, all 21 tracked stocks in the real estate and construction space are in the red, with year-to-date (YTD) declines ranging from a modest 5% to a staggering 38%. This sector-wide slump isn't just bad luck—it's a cocktail of escalating construction costs, a 13% drop in residential sales volumes in H1 2025 due to shifting buyer preferences and macroeconomic pressures, and affordability crunches in metros where prices have surged 21% annually. High interest rates and reduced launches have compounded the pain, leading to a 27% YoY dip in institutional investments to $1.2 billion in the first half. In this two-part deep dive, we'll unpack the first half of these laggards—11 stocks that...
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India’s Equity Market: The Strongest Long-Term Growth Story in Global Equities

India continues to shine as the most compelling long-term structural growth story in global equities, according to Christopher Wood, global head of equity strategy at Jefferies, in his latest GREED & fear report. Despite short-term challenges, India’s vibrant equity market, fueled by robust domestic inflows and a burgeoning pipeline of IPOs, underscores its unmatched potential.

Small- and Mid-Cap Stocks: High Valuations, Higher Potential

The GREED & fear report emphasizes the deepening of equity issuances, particularly in the small- and mid-cap segments, as a cornerstone of India’s growth narrative. The NIFTY Midcap 100 Index, trading at 27.3 times 12-month forward earnings, commands a premium over the NIFTY50’s 20.5 times multiple. However, this valuation is justified by the segment’s robust earnings growth potential, exceeding 20% annually. These dynamic sectors remain the most attractive part of India’s equity market, offering investors significant opportunities despite higher valuations.

A Surge in IPOs: Unlocking India’s Unlisted Potential

India’s equity market is poised for a transformative wave of initial public offerings (IPOs). The report highlights that India is home to 3,000 unlisted companies generating over $100 million in revenue. For every listed company, two more of similar scale are waiting to enter the capital markets. This vast pool of unlisted firms signals a potential IPO boom, with nearly 80 IPOs expected to raise $35 billion over the next 12 months. This pipeline reflects the attractiveness of India’s equity markets for corporates and private equity investors seeking exits at favorable valuations.

Foreign Ownership at Multi-Year Lows

Despite India’s strong fundamentals, foreign investor participation has waned. Foreign ownership of Indian equities has dropped from 22% in 2019 to a multi-year low of 16%. This decline coincides with India’s underperformance relative to MSCI emerging markets, lagging by 30 percentage points over the past year the worst since 1996. However, Wood views this as a “healthy consolidation” rather than a crisis, with India’s markets poised for long-term growth.

Domestic Inflows: The Backbone of Market Resilience

India’s equity market is supported by robust domestic savings, which have effectively absorbed the large equity supply. According to Mahesh Nandurkar, Jefferies’ India research head, speaking at the 4th India Forum in Gurgaon, domestic inflows from mutual funds and systematic investment plans (SIPs) are expected to keep markets stable. In the first five months of FY26, India saw $21 billion in equity inflows, including $3 billion monthly from SIPs alone. These flows nearly offset the $6–10 billion monthly equity supply. Looking ahead, Wood projects $50–70 billion in fresh equity supply over the next year as corporates and private equity firms capitalize on favorable valuations.

India’s Path to a $10 Trillion Economy

India’s equity market strength aligns with its broader economic ambitions. The GREED & fear report underscores India’s progress toward Prime Minister Narendra Modi’s goal of a $10 trillion economy. With steady domestic inflows, a robust IPO pipeline, and resilient small- and mid-cap segments, India remains a standout in global equities.

Why Invest in India Now?

India’s equity market offers a unique blend of growth and stability, driven by domestic capital and a dynamic corporate landscape. While foreign ownership is at historic lows, the market’s fundamentals remain strong, supported by consistent inflows and a promising IPO outlook. For investors seeking long-term growth, India’s small- and mid-cap segments present unparalleled opportunities.

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