How Niranjan Hiranandani Created the 'Real' estate Business Real estate was an accidental choice, ultimately I got into the world of business and then realised it's not just a cakewalk, says Niranjan Hiranandani, founder & chairman- Hiranandani Group

Kitne bade log hain ye.., thought the young Niranjan Hiranandani, MD of Hiranandani Group, when he used to see his father (Dr. Lakhumal Hiranand Hiranandani, an ENT surgeon and a recipient of the government of India's Padma Bhushan award) treats the likes of the Birla, Mafatal families. This was the beginning of an epiphany.

"It was always there in the back of my mind, the world of business looks very attractive. My father had the biggest Indian business tycoons as his patients. When I used to see these big business men, I used to be overwhelmed. Ultimately, I got into the world of business and then realised that it's not just a cakewalk. Initially, I started with a power loom, we used to run a small factory in Kandivali in the suburbs of Mumbai and did a little investment into real estate, both did badly. So, I had to sell one, however, I didn't know which one to let go. Finally, I sold the textile unit, this helped me to plunge into real estate," said the MD.

According to India Brand Equity Foundation (IBEF) By 2040, the real estate market will grow to INR 65,000 crore ($ 9.30 billion) from INR 12,000 crore ($ 1.72 billion) in 2019. Real estate sector in India is expected to reach $ 1 trillion in market size by 2030, up from $ 200 billion in 2021 and contribute 13 per cent to the country's GDP by 2025. Retail, hospitality, and commercial real estate are also growing significantly, providing the much-needed infrastructure for India's growing needs. India's real estate sector is expected to expand to$ 5.8 trillion by 2047, contributing 15.5 per cent to the GDP from an existing share of 7.3 per cent. In India, the real estate sector is the second-highest employment generator, after the agriculture sector.

The tectonic shift

First time the affordable housing sale has taken a dip. Originally, 29 per cent of the total sales in India was in the segment of affordable housing. In the initial six to eight months period of 2024, it has come down to 19 per cent. "This is shocking, it has never happened before," he said.

In the 2024-25 interim Budget, Finance Minister Nirmala Sitharaman announced a boost for India's affordable housing sector by adding 2 crore more houses to the flagship scheme PMAY-U. "The Prime Minister's Awas Yojana scheme is back again, for interest subvention for affordable housing. I think the affordable housing sector will bounce back once this scheme is brought into effect. They have recommended three crore houses, out of that, one crore is in the urban sector and two crores in the rural sector. As a corollary of the dip in affordable housing, the mid segment and the luxury segment grew faster. Overall, there has been a 15 percent growth in the last eight to ten months in the total overall sale of real estate countrywide," he added.

As per TechSci Research, India Affordable Housing Market was valued at $3.17 billion in 2024 and is anticipated to project robust growth in the forecast period with a CAGR of 19.80 per cent through 2030. Government initiatives have been pivotal in stimulating the India Affordable Housing Market.

In 2023, luxury home sales in India surged by 75 per cent, doubling their share in total housing sales. "Not only luxury but the mid segment is also growing. The affordable segment is still 70 percent of the market, however, their growth has dropped. The total volume of affordable housing is still the largest. We still have a long way to go in catering to the ultimate affordable segment. Coming to commercial real estate, it has also taken a hit because of the overall slump in the IT sector in America and the work from home post-COVID has affected the sector. Since, India's GDP has grown, the commercial sector is now coming back," he explained.

"Foreign direct investment is coming further into commercial real estate, which surprises me because in America, the commercial real estate is in the dumps, however, in India it is expected to grow. India is growing much better than even the western countries," he added. Construction is the third-largest sector in terms of FDI inflow. FDI in the sector (including construction development & activities) stood at$ 60.53 billion from April 2000-March 2024. The Government has allowed FDI of up to 100% for townships and settlements development projects, stated a report by IBEF.

Diversification of business portfolio

Education, entertainment, data centres, consumer tech, are the other diversified interests of the group. "The most important sectors are health and education, they are definitely going to grow. There is no doubt about it, however, for us, these sectors are not for profit, they are in charitable institutions and kept separately. The other part of it is a business of business, which is data centres, commercial, retail, hotel, hospitality and other stuff. These are the businesses which have arisen as a consequence of our development of townships."

According to Savills India, real estate demand for data centres is expected to increase by 15-18 million sq. ft. by 2025. Darshan Hiranandani promoted Yotta Data Services announced the commissioning of a INR 500 crore data centre in GIFT City in January. The company has invested INR 500 crore over the last five years to build the facility, which has a 2 MW power capacity. Niranjan Hiranandani-backed Yotta has made the largest bet on the promise of AI: It has announced the arrival of the world's fastest GPUs – NVIDIA H100 Tensor Core GPUs – at its NM1 data centre. This delivery further strengthens Yotta's positioning as NVIDIA's first Network Cloud Partner in India, and globally, as an elite partner, as it envisions to scale up its GPU stable to 32,768 by the end of 2025.

"The data centre business is actually run by my son, Darshan. I get the credit for it by being his father. The future of data centres in India is huge and humongous. The total quantity of data which arises in India today is more than the US and China put together. So, the future is going to become even bigger with 5G and artificial intelligence, coupled with all the attributes which the Prime Minister is focusing on in terms of growth of India in the IT side," he added.

Similarly, India's electronics industry is projected to have a production value of $300 billion by 2026. Hiranandani Group has ventured into the semiconductor industry in a significant way. It recently requested land from the Yamuna Expressway Industrial Development Authority (YEIDA) to build a modern semiconductor park. The group is keen to have a semiconductor assembly testing, marking, and packaging (ATMP) unit within the YEIDA region and the application is with the Government of India under the Indian Semiconductor Mission (ISM).

When asked about his involvement in the semiconductor business, he said, "Well, there are two ways to participate. One is participation in terms of investments, which we can always look at. In terms of working and actually doing the operations, I will not be in the picture, it will be by my son, similar to what is happening in the data centre business. I will continue taking care of the real estate business," he concluded.