Nifty Realty Index Logs 2nd Straight Weekly Decline for Week Ending Feb 14: What’s Driving the Fall?

The Nifty Realty Index has faced significant downward pressure, registering a 9.45% drop this week ending February 14, 2025, following a slight decline of 0.4% the previous week.

This marks a concerning trend, with the index falling nearly 20% in 2025 year-to-date, reflecting a broad-based decline across all its constituent stocks.

From a January high of 1,040.65, the index has now slipped to 827.45, highlighting the ongoing challenges in the real estate sector.

The continued negative returns from all constituents indicate a weakening outlook, driven by factors such as liquidity concerns and a cautious risk appetite among investors.

Why is the Nifty Realty Index Falling?

The sharp decline in the Nifty Realty Index reflects growing investor concerns about regulatory hurdles, liquidity issues, and a broader market aversion to risk, despite positive moves like the RBI’s recent rate cut.

In January, the index plummeted by 12%, with another 8% drop in February, positioning it as the worst-performing sector in India’s stock market.

Delays in project approvals, and persistent liquidity concerns, all have compounded challenges in the real estate sector.

Top losers in Nifty Realty index on February 14, 2025

The Nifty Realty Index saw significant pressure from its top four draggers, which have the highest weightage in the index. Godrej Properties, with a weightage of 12.5%, saw the largest decline, losing 2.84% and contributing a negative 3.04 to the index.

Oberoi Realty followed with a 3.56% drop, contributing -2.89, and holding a 9.4% weightage. Phoenix Mills, with a 15.01% weightage, experienced a decline of 1.91%, contributing a negative -2.43.

Lastly, Macrotech Developers, which holds the highest weightage of 16.57%, saw a 1.67% fall, contributing -2.35 to the index’s performance.

Historically, Nifty Realty has shown volatility in February, with 6 out of the last 15 years recording negative returns.

Conclusion

The Nifty Realty Index continues to face challenges due to factors like liquidity concerns, regulatory delays, and broader market conditions. With stocks such as Godrej Properties, Oberoi Realty, Phoenix Mills, and Macrotech Developers contributing significantly to the recent declines, the outlook for the sector remains under pressure. Historically, February has seen volatility in the sector, with past trends indicating mixed performance.

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