The National Stock Exchange’s (NSE’s) index services subsidiary, the NSE Indices Limited on April 11, 2023 launched India’s first-ever Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) Index – the Nifty REITs & InvITs Index.
The Nifty REITs & InvITs index will track the performance of REITs and InvITs that are publicly listed and traded at the NSE.
The Nifty REITs & InvITs Index has a base date of July 1, 2019, and a base value of 1,000, NSE announced in a press statement.
The weights of securities within the index are based on their free-float market capitalisation subject to a security cap of 33 per cent each, while the aggregate weight of the top-3 securities are capped at 72 per cent, NSE said in the statement.
The index will be reviewed and rebalanced on a quarterly basis.
Mukesh Agarwal, CEO, NSE Indices, said in a statement: “REITs and InvITs are recognised as strong alternative financial instruments to raise funds against the cash generating infrastructure and real estate projects. For investors, these instruments provide exposure to real estate or infrastructure assets and offer diversification of risk from regular asset classes like equity, debt and gold and generate regular income.”
“The launch of the Nifty REITs & InvITs Index – India’s first ever REITs & InvITs Index aligns with NSE’s vision to provide market representative benchmarks for different asset classes. The Nifty REITs & InvITs Index will track the performance of publicly listed REITs & InvITs and act as a benchmark for active funds,” he added.
What Are REITs And InvITs?
Real estate investment trusts (REITs) and infrastructure investment trusts (InvITs) are investment vehicles that own revenue-generating real estate or infrastructure assets.
They are a kind of hybrid securities. They are technically defined as a collective investment scheme similar to a mutual fund, which allows individuals and institutional investors to directly invest in real estate or infrastructure projects. They are designed as a tiered structure with the sponsor setting up the REIT or InvIT which in turn invests into the eligible real estate or infrastructure projects either directly or via special purpose vehicles (SPVs).
Through REITs & InvITs investors get exposure to diversified regular income generating real estate and infrastructure asset
