Jet Infraventure Ltd Management Discussions

ECONOMY:

Indian Economy

Despite the prevailing global uncertainties, the Indian economy is estimated to grow between 6.25-6.50% during the year 2025-26. The agriculture sector is expected to grow ~4%, the industrial sector ~6% and the services sector ~7%. In absolute terms, the agriculture sector continued to operate well above pre-pandemic trend levels. Whereas, in the industrial sector, sustained growth through FY 2023-24 and FY 2024-25, has led to the closure of the trend gap. The recovery within the services sector has been uneven, and as a result, the sector is only now approaching its long-term trend levels.

Policy rates remained unchanged through the April-December 2024 period with the repo rate at 6.50%. However, with relatively weaker growth prints and falling underlying inflation, the Monetary Policy Committee (MPC) changed its policy stance from ‘Withdrawal of Accommodation to ‘Neutral in October 2024. Further, to inject liquidity into the banking system a reduction in CRR to 4.00% of NDTL from 4.50% was announced in December 2024. In February 2025, the RBI lowered the repo rate to 6.25% in response to downward revisions in growth forecasts for H1 FY 2025-26, while keeping the inflation trajectory aligned with its target.

The Indian economy is expected to remain resilient, supported by robust consumption from households, alongside the governments continued focus on capital expenditure. Capacity utilisation in manufacturing remains high and balance sheets of banks and corporates remain healthy. The economy has also undergone rapid digitalisation over the past decade, significantly boosting productivity. The service sector has increasingly shifted towards high-tech digital solutions, including e-commerce, fintech, cloud computing and AI-driven services.

The risks to growth remain largely external – rising tariff barriers, stretched supply chains and continuing geopolitical tensions. The country will have to adapt to the evolving global landscape and harness its domestic strengths to drive growth in a sustainable manner.

Global Economy

World GDP grew by 2.7% in calendar year 2024, with regional growth varying significantly. The United States saw robust growth at 2.8%, while the Eurozone experienced more subdued growth at 0.8%. Growth in emerging markets was driven by India and China, which recorded growth rates of 6.5% and 5%, respectively. For the most part, the year was marked by improving financial conditions, declining inflation and a partial de-escalation of regional conflicts.

With global cross-border trade and investment flows slowing there is a growing risk of rising cost pressures, reduced productivity and slower efficiency gains. However, with trade in services not being directly affected by tariff elated disruptions, the global IT outsourcing market is expected to remain relatively resilient. Indias technology sector is expected to grow by around 5% in FY 2025-26, with revenues projected to exceed USD 300 billion.

India remains relatively insulated from global headwinds and is on track to become the worlds third-largest economy in the medium-term. It continues to be one of the fastest-growing large economies, supported by favourable demographics, investment led impetus, and ongoing regulatory reforms.

HIGHLIGHTS:

Despite prevailing global economic uncertainty, the Indian real estate sector has demonstrated sustained momentum over the past year, emerging as a key pillar of the nations economic revival. It continues attracting strong interest from domestic and international investors, driven by structural reforms, urbanisation and evolving consumer aspirations.

In particular, Indias residential real estate market has rebounded sharply in the post-pandemic period. From FY 2019 to 2025, total residential sales in major cities have surged by nearly 77% per cent, underscoring buyer confidence from FY 2019 to FY 2025. Primary transactions, comprising under construction homes sold by developers, accounted for 57% per cent of the total transactions in FY 2025. Secondary transactions, involving the resale of properties, made up the remaining 43% per cent, showing a notable shift from the 38% per cent share recorded in FY 2019.

Indias residential market maintained its upward momentum in FY2024-25, though trends varied by price segment. Affordable housing saw mixed results—sales fell 9% YOY in Q1 2025, but unsold inventory reduced by 19%, indicating gradual absorption. Growth remained restricted due to limited new launches and a developer shift toward premium housing. Despite affordability challenges, steady end-user demand helped clear inventory.

Luxury housing (above INR 1 crore) surged from 2019 to 2025, driven by higher incomes, lifestyle changes, and targeted developer efforts.

Office leasing rebounded sharply in FY2025, hitting record levels. Demand surged due to GCCs, IT/ITES, e-commerce, and flexible workspaces, especially in Tier 1 cities and emerging Tier 2 hubs. Indias office market shows strong absorption and positive rental growth.

While the sector is growing, it continues to face challenges like regulatory hurdles, rising construction costs, and liquidity issues, especially for smaller developers. While reforms like RERA and GST boost transparency, ongoing policy support and financing access are vital for long-term stability.

In summary, the Indian real estate sector showed resilience in FY 2024-25, overcoming global challenges to perform strongly across segments. Backed by investor confidence and adaptive consumer behavior, it remains a key economic pillar, set for continued momentum in FY2025-26, driven by urbanisation, infrastructure growth, and technology integration.

DIRECTIONS IN 2025-26:

As the Indian real estate sector enters FY2025 - 26, a new wave of disruptions and directional shifts is reshaping the landscape. Rapid expansion of the middle class, evolving consumer aspirations, and strong economic fundamentals are driving this transformation, further accelerated by technology adoption, changing urbanization patterns, ESG imperatives and regulatory reforms.

This evolving landscape is reshaping investor strategies and end-user preferences. Investors are pivoting towards future-ready, high-quality assets across diversified geographies, while end users are demanding smarter, more sustainable, and lifestyle driven spaces. This shift is redefining real estate value creation for the next growth cycle.

Indias real estate sector is poised to redefine growth in 2025-26, propelled by smart urbanisation, sustainable development, and digital innovation. While navigating affordability and global volatility, the market is transitioning towards future-ready assets, flexible living formats, and enhanced investor participation, setting the foundation for a resilient, technology-driven real estate ecosystem.

INVESTMENT MOMENTUM AND M&A PULSE:

Indias real estate sector demonstrated strong resilience through FY 2024–25, with deal volumes rising consistently across quarters despite macroeconomic challenges. Indias real estate sector maintained robust activity in FY 2024–25, achieving a total of 99 transactions with a combined value of around USD 6.99 billion. Deal volumes steadily improved compared to FY 2023–24, reflecting strong investor interest despite broader macroeconomic headwinds.

Private equity (PE) remained the dominant funding channel, accounting for USD 3.15 billion across 48 transactions, nearly half of the overall investment activity. M&A volumes increased notably to 36 deals, although values moderated to USD 619 million, highlighting a strategic shift toward mid-sized consolidations and platform-driven acquisitions.

Public market activity also contributed meaningfully, with IPOs and QIPs together raising approximately USD 2.99 billion, signaling strong capital markets support for the sector. Notably, QIP activity was particularly active in FY 2024–25, driven by institutional appetite for Grade A commercial, warehousing, and retail portfolios.

Investment flows continued to favour operational residential developments, income-yielding commercial assets, and logistics platforms, while early-stage proptech and co-living models gained visibility. The emergence of small and medium REITs (SM REITs) offered new avenues for fractional ownership and democratised access to institutional-grade real estate.

Investment activity was fuelled by expanding urbanisation, infrastructure development, demand for Grade A assets, warehousing, and emerging proptech sectors. The M&A landscape was dominated by domestic mid-sized consolidations, platform acquisitions by REITs, and targeted transactions in income-generating assets.

Looking ahead, FY 2025–26 is expected to build on this momentum, with increased platform consolidation, greater participation from global and domestic institutional investors, deepening proptech integration, and a sharper focus on sustainable, ESG-compliant assets. The continued evolution of SM REITs and the growth of alternative real estate asset classes are poised to reshape the investment landscape further.

HEADWINDS AND ROADBLOCKS

Indias real estate sector demonstrated resilience during FY 2024–25, yet it faced a complex set of challenges, many of which are expected to persist into FY 2025–26.

Economic and financial pressures: Global economic volatility and elevated domestic interest rates impacted homebuyer affordability and increased the cost of capital for developers. As housing prices rose faster than incomes, affordability constraints became more pronounced, particularly in mid-income and affordable segments. Private equity remained active, but fundraising for early-stage projects tightened. Execution and cost challenges: Supply chain disruptions, rising material costs, and margin pressures strained project viability. Developers needed to diversify sourcing and manage budgets carefully to sustain timelines. Additionally, growing sustainability expectations, particularly for commercial Grade A assets, added incremental compliance costs, although ESG adoption remains at an early stage in India. Regulatory and approvals hurdles: Land acquisition complexities, delayed environmental clearances, and slower municipal approval processes continued to cause project delays and added execution risk. While regulatory reforms like RERA have improved sectoral transparency, procedural hurdles remain particularly acute for new developments and smaller players.

Urbanisation and Infrastructure Gaps: Urban expansion continued to outpace infrastructure creation, leading to congestion and pressure on civic amenities, especially in Tier-2 and emerging Tier-3 cities. Infrastructure bottlenecks affected project attractiveness and viability beyond metro locations.

Digital transformation and cybersecurity risks: The push towards technology-driven real estate, including smart homes and digital transactions, has increased vulnerabilities to cybersecurity risks. Protecting sensitive data and adapting internal processes became essential, requiring additional investments by developers and service providers.

Evolving consumer preferences: Shifting demographics, a growing middle class, and post-pandemic lifestyle changes fuelled the demand for flexible living spaces, wellness-centric communities, and integrated live-work-play developments. Developers needed to rapidly adapt project designs and marketing strategies to remain aligned with new buyer expectations.

Global and political volatility: External macro factors — such as geopolitical tensions, commodity price fluctuations, and global capital flow uncertainties — continued to impact investor sentiment and posed risks to transaction volumes, particularly in cross-border investments.

Future outlook

Indias real estate sector enters FY 2025–26 on a resilient footing, supported by structural drivers such as urbanisation, infrastructure expansion, capital market innovations, and accelerating digitalisation. Despite global uncertainties and domestic affordability challenges, the sector is expected to continue evolving towards greater institutionalization, technological integration, and sustainable growth. Residential demand is anticipated to sustain its momentum, driven by the mid-income and premium segments, while affordable housing may face ongoing affordability pressures. Developers are expected to strategically pivot towards well-connected suburban hubs and Tier-2 cities, leveraging infrastructure-led growth corridors. Cities like Jaipur, Bhubaneswar, Nagpur, and Vishakhapatnam are becoming growth hotspots due to increased government focus on regional development and rising employment opportunities outside of traditional metros. Developers are shifting focus from high-end to volume-based affordable projects that offer greater sales velocity and cater to the aspirations of Indias growing middle class. At the same time, the concept of "live-work-play" communities—self-sustained townships offering integrated amenities—is gaining momentum among urban homebuyers.

Commercial real estate will likely remain robust, fuelled by the continued expansion of global capability centres (GCCS), technology sector leasing, and growing tenant demand for flexible, ESG-compliant Grade A office spaces. Digitalisation, tenant experience upgrades, and smart asset management will become increasingly critical for maintaining occupancy and rental growth. Office spaces will not disappear but will evolve to become more flexible, collaborative, and technology-enabled. The demand for Grade A offices, tech parks, and managed co-working spaces is expected to remain strong, especially in IT hubs like Bengaluru, Hyderabad, Pune, and Chennai. Further, India is fast becoming a global hub for data centres, thanks to the exponential rise in digital consumption, which is attracting heavy investment from technology firms and global investors.

Industrial and logistics assets are poised for further expansion, supported by domestic manufacturing incentives (PLI schemes), fuelled by the boom in e-commerce, rapid digitisation of retail, and the push for robust supply chain networks. This sector is shifting from fragmented, unorganised setups to institutional-grade warehousing parks. The implementation of GST and the National Logistics Policy is helping to streamline operations and attract foreign direct investment (FDI) in this space.

Investment trends are expected to deepen around platform-led acquisitions, strategic mid-sized consolidations, and expanding REIT platforms. The evolution of small and medium REITs (SM REITs) is unlocking new investor participation, and emerging innovations such as real estate tokenisation— although still nascent—offer the potential to further democratise ownership and enhance liquidity in traditionally illiquid asset classes.

BUSINESS OVERVIEW

Our Company focuses on residential projects and it has created strong footing in the States of Maharashtra and Gujarat for executing residential projects by developing projects featuring apt model of execution. Our Company develops projects on affordable pricing, to our prospective customers, without compromising on quality construction and this is ensured by experienced project execution team and insightful architectures appointed independently. It intends to exploit the opportunities that are available in the Real Estate Sector and our operations will cover all aspects of real estate development, from the identification and acquisition of land, the planning, execution and marketing of our projects, maintenance and management of our completed developments etc. Companys ongoing destination is at Hill Station at Dharampur, Valsad known as Wilson Hills.

Change in key ratios is part of financials.

COMPANY STRENGTHS

Your Company continues to capitalize on the market opportunities by leveraging its key strengths. These include:

1. Brand Reputation: Enjoys higher recall and influences the buying decision of the customer. Strong customer connects further results in higher premium realizations.

2. Execution: Possesses a successful track record of quality execution of projects with contemporary architecture.

3. Significant leveraging opportunity: Follows conservative debt practice coupled with enough cash balance which provides a significant leveraging opportunity for further expansions.

4. Outsourcing: Operates an outsourcing model of appointing globally renowned architects/contractors that allows scalability and emphasizes contemporary design and quality construction – a key factor of success.

5. Transparency: Follows a strong culture of corporate governance and ensures transparency and high levels of business ethics.

6. Highly skilled execution team: Employs experienced, capable and highly skilled design and project management teams who oversee and execute all aspects of project development.

COMPETITION:

Our Company faces competition from various domestic real estate developers. Our competition varies depending on the size, nature and complexity of the project and on the geographical region in which the project is to be executed. We believe that our capability, experience and reputation for providing safe and timely quality services allow us to compete effectively.

CAUTIONARY STATEMENT

This management discussion and analysis contain forward looking statements that reflects your Companys current views with respect to future events and financial performance. The actual results may differ materially from those anticipated in the forward-looking statements as a result of many factors.