Shares of real estate companies rose on Thursday, with NSE's Nifty Realty index gaining 3 percent, after the government approved a Rs 25,000 crore special window to provide funding to the affordable and middle-income projects.

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Sobha shares rallied 8 percent intraday on Thursday, while Indiabulls Real Estate, Prestige Estates, and Oberoi Realty surged 4.47 percent, 3.8 percent, and 3.16 percent, respectively.

Shares of real estate firms advanced in the previous session as well after Sitharaman on Tuesday said the government may announce new reforms soon and that the real estate sector could be the beneficiary. The Nifty Realty index had rallied nearly 3 percent yesterday.

In the proposed alternative investment fund, the government will invest Rs 10,000 crore and the rest amount (Rs 15,000 crore) will be funded by LIC Housing Finance, State Bank of India and other such firms.

According to the finance minister, the fund will be used to complete housing units worth less than Rs 2 crore/per unit in Mumbai Metropolitan Region, Rs 1.5 crore in Delhi-National Capital Region (NCR), Pune, Ahmedabad, other metros and Rs 1 crore in other cities.

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