Swarup Mohanty and the mutual fund capital pipeline quietly reshaping Indian real estate

The capital channel India's real estate sector has been waiting for

India's real estate investment landscape has undergone a structural shift that most market participants have yet to fully price in. While private equity funds, family offices, and alternative investment funds have dominated headlines for the past decade, a quieter, potentially larger capital channel is now opening: the mutual fund industry.

At the center of this transformation sits a regulatory catalyst and the institutional leaders positioned to act on it. Swarup Mohanty, CEO of Mirae Asset Investment Managers (India) Private Limited, leads one of India's most significant asset management companies at a moment when the boundaries between traditional mutual fund portfolios and real estate exposure are dissolving.

The numbers already tell a compelling story. Mutual fund exposure to REITs and InvITs in India jumped 56% over the past year, growing from approximately ₹20,000 crore to over ₹31,000 crore, according to ET Money. This growth coincides with institutional real estate investments in India reaching ₹40,801 crore (US$4.33 billion) in the first half of 2026, a 23% year-on-year increase, according to JLL India. Domestic institutional investors contributed 64% of total real estate investment volumes in H1 2026, amounting to ₹26,384 crore (US$2.8 billion), the highest share recorded to date.

These figures point to an irreversible trend: Indian capital, not foreign capital, is becoming the dominant force in institutional real estate. And mutual funds represent the largest untapped reservoir within that domestic pool.

How does SEBI's REIT reclassification change the game for asset managers like Swarup Mohanty?

The single most consequential regulatory development for mutual fund participation in real estate arrived on January 1, 2026. SEBI notification SEBI/LAD-NRO/GN/2025/272 reclassified Real Estate Investment Trusts (REITs) as equity-related instruments for mutual funds and Specialised Investment Funds (SIFs), shifting them away from their previous debt-oriented treatment.

This reclassification is far more than a technical adjustment. It fundamentally changes the portfolio construction calculus for every AMC in India. Under the previous framework, REIT allocations competed with fixed-income instruments for space in fund portfolios, limiting the quantum and strategic rationale for exposure. Under the new classification, REITs sit alongside equities, allowing fund managers to treat them as growth instruments with yield characteristics, a combination that aligns naturally with the risk-return profile of diversified equity schemes.

For an AMC of Mirae Asset's scale, led by Swarup Mohanty, this opens significant headroom. Equity-oriented mutual fund assets under management across India's AMC industry dwarf the fixed-income segment. Reclassifying REITs as equity instruments means that the addressable pool of capital that can flow into listed real estate vehicles has expanded by orders of magnitude.

The regulatory architecture supporting this shift extends beyond the REIT reclassification. SEBI's May 2026 circular (SEBI/HO/DDHS/DDHS-PoD-2/P/CIR/2026/117) expanded the permitted uses of fresh borrowings for InvITs when net borrowings exceed 49% of asset value, allowing borrowing for capital expenditure, major maintenance, and debt refinancing. This enhances the financial flexibility of InvIT structures, making them more attractive to institutional allocators who demand predictable capital management from the vehicles they invest in.

Meanwhile, the 2024 regulatory framework for Small and Medium REITs (SM REITs), established under the SEBI (REIT) (Amendment) Regulations 2024, brought fractional ownership platforms with asset sizes between ₹50 crore and ₹500 crore under formal SEBI supervision. This creates a regulated pipeline for smaller commercial assets to eventually graduate into institutional-grade listed vehicles, expanding the universe of investable real estate for mutual funds over time.

Taken together, these three regulatory moves construct a comprehensive architecture for AMC participation in real estate: reclassification removes portfolio constraints, InvIT reforms improve instrument quality, and SM REIT regulation expands the investable universe.

Can mutual fund capital scale fast enough to meet India's ₹20 trillion REIT and InvIT ambition?

According to Avendus Capital, India's REIT and InvIT market AUM is projected to cross ₹20 trillion by 2030, up from approximately ₹10 trillion currently. Domestic mutual funds, insurance companies, and pension funds are expected to drive this growth. Achieving a doubling of market AUM in roughly four years demands a sustained and substantial increase in capital allocation from institutional domestic sources.

Mutual funds are uniquely positioned to deliver this scale. India's mutual fund industry manages assets exceeding ₹65 lakh crore, and even a marginal increase in allocation percentages toward listed real estate vehicles translates into thousands of crores of incremental capital. The 56% year-on-year growth in mutual fund exposure to REITs and InvITs suggests that this reallocation is already underway.

The supply side is responding accordingly. In early 2025, Sattva Group and Blackstone filed papers for a Real Estate Investment Trust named Knowledge Realty Trust, targeting a raise of up to ₹7,500 crore with a gross asset value of approximately ₹60,000 crore, as reported by The Economic Times. Shivam Agarwal, a key figure associated with Sattva Group, represents the developer-sponsor side of this equation, creating the listed vehicles that AMC capital can flow into.

This convergence of capital supply and instrument supply marks a maturation point for Indian real estate markets. The ecosystem now features three distinct and complementary pillars: AMC-led capital allocation (represented by leaders like Swarup Mohanty), large-scale developer-sponsored REIT platforms (such as Sattva Group's Knowledge Realty Trust), and institutional networking and knowledge infrastructure (provided by platforms like GRI Institute, which convenes senior real estate and infrastructure leaders across markets).

The question of scale, however, depends on several variables. Liquidity in listed REIT units must deepen to accommodate large mutual fund positions without excessive price impact. Dividend distribution policies must remain attractive enough to justify equity-style allocation. And AMCs must build dedicated real estate research capabilities, a function that has historically resided in private equity and specialist advisory firms rather than mainstream fund houses.

The institutional blueprint: what Swarup Mohanty's position signals for the industry

Swarup Mohanty's leadership at Mirae Asset Investment Managers (India) carries particular significance in this context. Mirae Asset operates one of India's largest and most sophisticated AMC platforms, with a track record of building scale in passive and thematic investment products. The firm's capacity to channel systematic capital into listed real estate vehicles, whether through dedicated schemes, sectoral funds, or blended equity products, positions it as a bellwether for AMC industry behavior.

The broader industry implication is clear: as AMC leaders of Mohanty's stature engage with real estate as an asset class through listed instruments, it sends a signal to the entire mutual fund distribution ecosystem. Distributors, financial advisors, and digital platforms begin to incorporate REITs and InvITs into client portfolios, creating a retail-to-institutional feedback loop that amplifies capital flows.

This dynamic is precisely why the AMC-to-real-estate capital pipeline deserves dedicated attention from the real estate industry. Discussions at GRI Institute events and within the GRI Institute community of senior real estate and infrastructure leaders increasingly reflect this convergence, as developers, fund managers, and institutional allocators seek to understand the mechanics and implications of mutual fund capital entering their markets at scale.

What this means for capital allocation strategy across Indian real estate

The emergence of mutual fund capital as a structural force in Indian real estate carries three strategic implications.

First, pricing discipline will intensify. Mutual fund allocators operate under daily NAV disclosure, regulatory scrutiny, and fiduciary standards that demand transparent valuation. As their share of REIT and InvIT ownership grows, the pressure on sponsors to maintain rigorous asset-level reporting and governance will increase.

Second, asset selection will narrow. Mutual funds prefer liquid, well-governed, and geographically diversified portfolios. This favors large-scale, institutional-quality commercial assets in established markets, precisely the profile of assets entering REIT structures like Knowledge Realty Trust.

Third, the cost of capital for commercial real estate developers will decline over time. As a deeper and more diverse investor base emerges for listed real estate instruments, cap rate compression and improved access to growth capital become structural features of the market.

India's real estate sector is entering a phase where the most consequential capital decisions are being made not on construction sites, but in AMC boardrooms. Leaders like Swarup Mohanty, regulatory frameworks crafted by SEBI, and institutional platforms such as GRI Institute are collectively constructing the infrastructure for a market that could double in AUM within four years. The mutual fund industry's engagement with real estate is no longer experimental. It is becoming foundational.