New Delhi: On Tuesday, NSE Indices Ltd, a subsidiary of the National Stock Exchange (NSE), announced the launch of India’s first-ever Real Estate Investment Trusts and Infrastructure Investment Trusts index, called Nifty REITs and InvITs Index. The index has been introduced to track the performance of publicly listed and traded REITs and InvITs on the NSE.
REITs and InvITs are investment vehicles that own revenue-generating real estate and infrastructure assets, respectively. These instruments are recognised as robust alternative financial tools to raise funds against cash-generating real estate and infrastructure projects. Through these trusts, investors get exposure to diversified regular income-generating assets and risk diversification from conventional asset classes such as gold, debt and equity while earning a regular income.
Mukesh Agarwal, the CEO of NSE Indices, stated, “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 securities weights within the index will be based on their free-float market capitalisation, subject to a security cap of 33% each, and the aggregate weight of the top three securities is capped at 72%. The Nifty REITs and InvITs index has a base value of 1,000, and it will be reviewed and rebalanced quarterly.
This index is expected to offer investors a simple, efficient and transparent way to track the performance of listed REITs and InvITs. It will also encourage the growth of the REITs and InvITs market in India by boosting investor confidence in these instruments. Additionally, this index will act as a benchmark for mutual funds and exchange-traded funds that invest in REITs and InvITs.
In conclusion, the launch of the Nifty REITs and InvITs Index is a significant step towards providing investors with an alternative investment opportunity in real estate and infrastructure assets. It will offer diversification and regular income to investors and boost the growth of the REITs and InvITs market in India.
