Nifty Realty soars over 3% to record biggest one-day gain in 6 months | Stock Market News

Stock Market Today: Indian markets staged a sharp rebound on Friday, November 22, fueled by value buying at lower levels and a rally in blue-chip stocks. Despite no fundamental changes or fresh catalysts, investors viewed the recent sharp decline in Indian stocks as an opportunity to enter the market, which propelled the front-line indices to clock gains of over 2%.

Real estate stocks, too, saw strong investor demand today, with the Nifty Realty index posting a 3.17% gain—its biggest single-day increase in the last six months. Nine out of the ten constituents of the index closed in the positive, with Raymond leading the way, surging nearly 16%.

This jump came as the company received a no-objection certificate (NOC) from the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) for the demerger of its real estate business, as announced in its stock exchange filing on November 21.

Post-demerger, the new company, Raymond Realty Limited (RRL), will be listed on both stock exchanges after securing the necessary approvals.

Meanwhile, Sobha emerged as the second-best performer in the index, gaining 7.4%, reaching ₹1,629.30 per share, after the domestic brokerage firm Investec initiated coverage on the stock with a target price of ₹2,150 apiece. 

Investec highlighted that Sobha has benefited from strong demand and higher realisations in Bengaluru, along with consistently healthy operating cash flow (OCF) and reduced balance sheet leverage.

Other stocks such as Phoenix Mills, Godrej Properties, DLF, Mahindra Lifespace Developers, Oberoi Realty, Brigade Enterprises, and Macrotech Developers closed with gains ranging between 1% and 6.1%.

Commenting on today’s market performance, Vinod Nair, Head of Research, Geojit Financial Services, said, “The market witnessed a significant broad-based rally from the oversold territory, predominantly led by large-cap stocks, as their valuations appeared appealing with expectations of improvement in corporate earnings in the second half of the fiscal year.”

“Positive momentum was also observed in global markets, due to a modest decline in Japan’s October inflation and 39 trillion-yen stimulus package. Moderation in global and domestic political drama provided a relief to the domestic market,” he added.

Posted healthy performance in Q2

Real estate companies delivered a healthy performance for the September-ending quarter fueled by a steady rise in demand for residential properties, with companies like Godrej Properties reporting a five-fold increase in their consolidated net profit.

The steady rise in demand for housing projects has also prompted companies to raise ₹12,801 crore through Qualified Institutional Placements (QIP) between January and September, according to the latest report from Anarock.

The QIP approach allows companies to bypass the traditional Initial Public Offering (IPO) route and quickly raise significant funds. 

Companies are optimistic about achieving 20-30% growth in FY25, even with a high base. While they remain confident in the sustainability of demand for the next few years, many companies have expressed concerns about approval delays, which could impact their launch timelines and, consequently, their pre-sales targets, according to domestic brokerage firm Motilal Oswal.

In FY24, India’s residential real estate sector reached a major milestone, surpassing the billion-square-foot sales mark with a notable 20% year-over-year increase, totalling 1.1 billion square feet.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.