New Delhi: Thanks to improved market sentiment and funding-raising activities of realty firms, the country’s mutual funds have turned bullish on the real estate sector, with their investment in property stocks soaring to Rs1,421 crore till July.
The value of realty stocks held by fund houses stood at just Rs171 crore in December, when the economy was experiencing the tremors of the global financial turmoil.
Going by the data with mutual fund tracking firm Value Research, the money parked by these entities in realty scrips is Rs1,421 crore till July, more than an eight-fold jump as compared to the investment in December last year.
“Cash-strapped real estate firms have been able to mobilise liquidity by way of share sale. This has led to confidence among investors that a balloon burst in the sector is not expected in the near term,” Taurus Mutual Fund managing director R.K. Gupta said.
At the end of July, MFs held 8.84 crore realty sector shares, much higher than the 1.66 crore held in December 2008.
“We foresee value creation in realty in the long term and expect opportunities of better return would come in longer term,” Shinsei AMC chief executive Piyush Surana said.
While the exposure of the funds to realty fell to Rs124.81 crore at the end of March, the figure ran up to Rs1,113.26 crore at the end of June and in July this rose to as much as Rs1,421.09 crore.