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From the Field

Fragile Financialization: The Struggle for Power and Control in Indian Real-Estate Investment

How does the financialization of real estate—a global phenomenon—affect urban development in India? In this ethnographic essay, Llerena Guiu Searle shows how financialization redefines the balance of power between the real-estate sector, local authorities, and financial investors.

Advertisements for a residential township 40 km (25 miles) outside of Chennai, India, called Hiranandani Parks Oragadam–Chennai, show cream-colored colonnaded buildings with grand porticos and blue tile roofs against a backdrop of undeveloped greenery. In a video on the developers’ website, a voice-over touts the “expansive” roads, “expat” residents, and natural beauty of this “mega-township,” as well as amenities like a golf course and cricket pitch. This is just one of the many townships—with millions of apartments—under construction across India, part of a flurry of real-estate and land deals beginning in the early 2000s that has accelerated urbanization and tied up millions of acres of land in housing, industrial, and infrastructure projects. [1]

This advertisement highlights use values for potential residents. However, such uses are intertwined with the property’s financial value, as something that promises future returns to investors. If we think of buildings as “sets of events defined by the movement of capital into and out of them” as much as places for living (Weber 2015, p. 41), then properties like Hiranandani Parks reveal the volatility of capital flows that have shaped Indian urbanization. The difficulties of abstracting land and buildings into finance are such that this property remains unfinished today although the project began in 2007.

Such delays reveal the fragility and variability of financialization. In the context of housing, Manuel Aalbers propounds that financialization is “variegated”—both “rife with contradictions and tensions” and “contingent, fragmented, incomplete, and uneven”—owing to the diversity of housing policies and markets around the world (Aalbers 2017, p. 244). I agree. If we conceptualize financialization as a “practical accomplishment” (Ouma 2016, p. 83), a set of contingent sociopolitical projects for making the built environment into a financial resource, then we can see how these projects necessarily differ from place to place and fluctuate through time as financiers encounter—and attempt to abstract—local specificity and uses.

Comparison throws such differences into relief. For example, studies of private-equity investment in rental housing in New York City also show it to be “fragile” (Fields 2017, p. 600) and “unstable” (Teresa 2016, p. 466). Private-equity investors flocked to rent-regulated rental housing in 2005 as an “underperforming asset” they hoped to exploit, but their attempts to treat housing as a pure financial asset entailed harassing and evicting tenants, raising rents, and neglecting building maintenance (Fields 2017, p. 594). As mortgages for these distressed assets changed hands, tenants suffered in dangerous living conditions. Fields argues that “the divergence between the exchange value of housing-backed financial assets and the use value of housing itself exposes the working poor to violence,” while also creating avenues for tenant activism (Fields 2017, p. 597). While financiers’ speculations are based on the separation of use from exchange values, this separation is illusory, a contradiction that produces conflict (Christophers 2010).

The Hiranandani Parks case study that follows suggests that this central contradiction between use and financial values produces conflicts among agents of financialization, not just financiers and tenants. Financiers face the problem of transforming immovable, unique parcels of land into abstract, homogeneous financial assets, of “creating liquidity out of spatial fixity” (Gotham 2009). To make land and buildings into internationally fungible assets, they must be “disembedded” (Callon 1998) and then re‑embedded in new property regimes (Li 2014) and infrastructures for trading (MacKenzie 2006). As I have argued elsewhere, this work is often accomplished through chains of intermediaries, who, together, transform land into something investable. However, contradictions in these chains can threaten the profits they are established to generate (Searle 2018).

Volatility and conflict in India

In India, the liberalization of the real-estate sector in the early 2000s opened Indian property to foreign investment in a context in which mortgage securitization was almost nonexistent and formal sources of real-estate capital were historically scarce. Regulations specified that foreign investors could not buy existing buildings or land but had to invest in construction projects of a certain size and capitalization. The diversity of land-tenure patterns (see Ghertner 2015), local political coalitions, and shifting regulations rendered this process complex and improvisational. Searching for risky, high-yield investments, investors sought to gain access to these projects by partnering with Indian real-estate developers who could agglomerate land, change land-use restrictions, and oversee construction. Indian developers also sought listings on the Bombay Stock Exchange or the London Stock Exchange’s Alternative Investment Market (AIM) to fund ambitious expansion plans. Foreign investors poured $15 billion into the sector from 2006 to 2008 (Grant 2019).

Indian real-estate developers served as important intermediaries to global capital—and yet investor–developer partnerships were fraught with frictions, as my ethnographic fieldwork in the industry between 2006 and 2008 revealed (Searle 2016). Investors and developers debated whether value lay in agglomerating land or developing buildings, and whether finished buildings should be leased or sold. They debated how much should be spent on construction, how to run construction projects, and how to attract prestigious commercial tenants. Deals fell through because foreign investors did not see Indian developers as “transparent” or credible business partners, and because Indian developers did not see the value in giving up control of their companies to outsiders.

These frictions, the global credit crisis of 2008, and slowed economic growth in India contributed to foreign capital flight in the early 2010s and to stagnation in residential property markets since then. Foreign investment accounted for 10% of investment in Indian real estate in 2008, only to drop to 0.6% in 2013, as foreign funds tried to disentangle themselves from investments in the wake of the global credit crisis (KPMG and NAREDCO 2014). Of the 35 foreign funds investing in Indian real estate between 2005 and 2007, “only four or five [were] left” in 2012 (Anand 2012). Some of the building projects that foreign investors abandoned—precise numbers are not available—were eventually completed, but years after their promised completion dates. As the economy floundered, housing demand stagnated and the rupee depreciated against the dollar, real-estate development companies became embroiled in scandal and weighed down by debt. Indian banks and nonbanking finance companies, which together had loaned $70 billion to the industry, cut back lending, and developers found themselves unable to complete construction. Today there are half a million unfinished apartments in India (Bellman 2020), even as financiers have found new ways to invest, particularly in commercial real estate (Grant 2019).

In what follows, I detail a dramatic case of failed foreign investment. Given the lack of data, it is unclear how representative this case is, but court filings and other documents reveal internal conflicts between investors and developers that are difficult to see in other cases—and are certainly invisible from the project’s celebratory advertisements. The conflicts that emerge in this case dramatize the contradictions of financialization that financiers must manage to turn real estate into finance.

Abstracting land

In 2006, the Hiranandani Group, a prominent Mumbai-based company founded by brothers Niranjan and Surendra Hiranandani in 1978 listed the real-estate fund Hirco on the AIM in 2006, garnering $591 million (€469 million), the most of any initial public offering on the AIM that year (Kavanagh 2010). The Hiranandanis [2] were the central actors in forming Hirco, creating chains of intermediaries to connect construction projects in India to investors around the world through the fund (initial investors included some of HSBC’s private clients and Standard Life [Jha 2014]). The Hiranandanis enrolled bankers and accountants with offices in London, and lawyers in London, Philadelphia, the Isle of Man, and Mumbai to design the fund structure and navigate the AIM listing. The Hiranandanis also enrolled a public-relations firm headquartered in the US and international property consultancies as members of the chain of intermediaries. By valuing the land that the Hiranandanis aggregated and sold to the fund, publishing those valuations in annual reports, and circulating positive press releases, these companies helped to transform the land discursively into future asset streams in which investors abroad, through Hirco, could invest.

In 2007, the fund Hirco invested £350 million “to purchase 588 acres (238 ha) of land in Panvel [Navi Mumbai] and 368 acres (149 ha) of land in Chennai from Hiranandani-controlled entities” (Hirco plc 2013, p. 4). Hirco invested money by buying preference shares in a Mauritius-based company, which in turn owned project companies that owned the land (Hirco plc 2013, p. 4; Jha 2014). The fund’s tiered corporate structure (see Figure 1) constituted a chain of intermediate corporate entities that abstracted from the specificities of fixed parcels of land in India, in effect turning them into shares that could be traded in offshore companies and on the AIM. This abstraction is a hallmark of financialization, wherein “property rights over commodities that are concrete bearers of value are increasingly represented by fictitious assets, giving rise to an autonomous economic sphere where ideal claims upon value are exchanged” (Pereira 2017, p. 606).

Figure 1. Hirco organizational structure

Source: Hirco plc (2006).

Fragile financialization

However, in this case, the “autonomous economic sphere” was never entirely autonomous of the contradictions that the fund’s structure produced, nor from the concrete difficulties of constructing buildings in India. Despite its successful listing, Hirco faced difficulties post‑2008. In 2009, Laxey Partners, a hedge fund holding just over 10% of Hirco’s shares, began pushiinininng for a change in management. Posting losses in September 2010, Priya Hiranandani-Vandarevala and two other board members stepped down, and Niranjan Hiranandani resigned as chairman that December. Three years later, the fund fell apart. In February 2013, Hirco’s managers sued Niranjan Hiranandani and Priya Hiranandani-Vandarevala in the Isle of Man, alleging that they “intended to enrich themselves at the expense of Hirco and its investors” by defrauding investors of the millions that they had invested in the Panvel and Chennai projects (Hirco plc 2013, p. 8).

Though apartments had been sold, little had been built at the Panvel and Chennai sites. The Hirco Palace Garden in Chennai (renamed Hiranandani Parks Oragadam–Chennai in 2016), envisioned to include “1,700 apartments, a five-star hotel, and a nine-hole golf course” (Kamath 2014) was launched in April 2007, with delivery promised by June 2010. Only 496 residential units were completed by 2014 (Nandy 2014). The Navi Mumbai township project was designed to house 5,000 people, yet the first phase of apartments were only in “various stages of completion” in 2014 (Nandy 2014). The project companies availed of debt from Indian banks, but when they defaulted on the loans, the banks foreclosed on the properties, and the Hiranandani Group bought the properties at a discount (Jha 2014; Hirco plc 2013, p. 5; Kamath 2014; Nandy 2014).

Faced with these losses, Hirco began arbitration with the Hiranandanis in Singapore and legal proceedings in the US (Hirco plc 2013, p. 8). In September 2013, Hirco’s board wrote down its investments to nil and suspended trading of its shares. It withdrew its listing five months later (Hirco plc 2014). Arbitration in Singapore was eventually settled in 2016 favor of the Hiranandanis, who had sought “declarations of non-liability” for the fund’s losses (Bharucha 2016; DLA Piper 2016).

This case provides a glimpse at the frictions internal to financialization. [3] Hirco’s complaints reveal the onerous and risky work necessary to agglomerate Indian land and transform it into shares. Indeed, the Hirco offer document emphasizes one of the “key strengths” of the fund is its “exclusive access to an identified near-term pipeline of township and co‑located SEZ [Special Economic Zone] developments in leading Indian primary and secondary city areas” (Hirco plc 2006, p. 12). That access was through the Hiranandanis: the fund was to invest in “certain FDI [Foreign Direct Investment] compliant Indian real-estate development projects to be sourced by Niranjan Hiranandani, Kamal Hiranandani and other entities controlled by them” (Hirco plc. 2006, p. 11).

Hirco’s managers later alleged that the Hiranandanis in fact did not successfully agglomerate contiguous parcels of land at Panvel. According to Hirco:

[T]he Panvel land was a scattered collection of irregular parcels which were not contiguous. Many of the plots were landlocked and did not have road access. Some of the plots had smaller plots contained entirely within them which were owned by third parties (Hirco Holdings Limited vs Niranjan and Kamal Hiranandani 2015, p. 54).

Such land posed major problems for development, as did the steep hills on “nearly one third of the total Panvel land,” which were protected by environmental restrictions. Hirco also alleged that the Hiranandanis did not have clear title to the land: of the 280 acres (113 ha) designated for residential development at Panvel, the Hiranandanis allegedly only owned 33 acres (13 ha) when Hirco invested in 2007 (Hirco Holdings Limited vs Niranjan and Kamal Hiranandani 2015, pp. 63–70).

Government approvals for development were another sticking point. The Chennai project required environmental clearances, permission to build high-rise buildings in a rural area, clearance to widen a road that ran through a reserved forest area, and Special Economic Zone approval. However, Hirco investors alleged that the Hiranandanis failed to get the necessary government approvals to develop either site, rendering them parcels of undevelopable land, not real-estate developments promising sales and lease income.

These land issues point to the challenges that any project of making Indian land into liquid assets might face. Complex and varied local land-tenure arrangements; small parcels distributed between members of extended families; no land-title insurance; and the necessity of working with an array of government offices for permits and clearances make obtaining land difficult. Yet these very risks made Indian real estate a potentially lucrative and highly sought-after investment.

As Nikita Sud (2014) has shown, agglomerating land and obtaining government permissions requires forging relationships with local intermediaries: brokers, touts, political-party operatives, thugs, landowners, and others—that is, extending the chain of intermediaries locally as well as internationally. Hirco’s allegations highlight just how difficult this task is and how vital the Hiranandanis’ function as intermediaries was between such local actors and international investors.

While chains of intermediaries enabled investors who had never been to India to buy and sell shares in Indian projects, they also posed risks stemming from the contradictions that can emerge when agents with divergent interests and knowledge are brought together. Abstraction was achieved at the expense of oversight, when investors relied on intermediaries the Hiranandanis assembled. When investors wanted to pull their money out, they found that, without construction activity, the land was not liquid but tied up in local relationships they could not fathom or control.

Investors bought and sold shares in Indian construction projects by funneling money through nested corporate entities—but this same fund structure could also be used to deny liability. Hirco’s managers blamed the fund’s unprofitability on the Hiranandanis, who, in turn, claimed that they had no control over the construction companies and that they were “not involved in the day-to-day operations of the project,” which they “subleased” to contractors hired to do the actual construction work at the Chennai and Panvel sites (Kamath 2014).


The Hirco case demonstrates the work that underlies the creation of liquid assets out of fundamentally illiquid property and financial promise out of concrete homes; this is the work that underlies many of India’s new townships, office parks, and high-rises. As financiers navigate local specificity and abstract from it, financialization necessarily differs from place to place—in terms of assets, agents, and mechanisms—making it variable, contingent, and always open to failure. Returning to the comparison with which I began, we can see that, like private-equity investors in New York City rental housing, Hirco’s investors’ expectations of growth proved to be unrealistic, “throwing the value of the properties into question and therefore troubling the financial capital” (Teresa 2016, p. 466). However, this case study highlights contradictions among the agents of financialization—rather than between financiers and tenants—that arise from attempts to abstract property.

Moreover, Hirco’s investors’ assumptions were not just “troubled” by events outside of everyone’s control; they were perhaps actively scuttled by their Indian partners, who deftly built and manipulated the networks of intermediaries necessary to abstract land into finance. Because buildings-as-assets were not pre‑existing, as the apartment complexes in New York were, they had to be constructed from scratch, lengthening project timelines, the number of intermediaries involved, and the risk. This case suggests that financialization is “rife with contradictions and tensions” (Aalbers 2017, p. 244) because it is never fully autonomous from the underlying assets in their particularity and concreteness (or in this case, incompleteness)—nor from the networks of intermediaries which bring agents with conflicting interests and expertise together in a contradictory enterprise shaped by struggles over power and control. What remains to be seen is whether such contradictions can be exploited by policymakers, activists, or others who wish to resist financialization or shape the urban spaces financiers help produce.


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Llerena Guiu Searle, « Fragile Financialization: The Struggle for Power and Control in Indian Real-Estate Investment », Metropolitics, 27 November 2020. URL :

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