NSE Indices Ltd, an arm of the National Stock Exchange (NSE), on Tuesday launched the country's first-ever Real Estate Investment Trusts and Infrastructure Investment Trusts index -- Nifty REITs and InvITs Index.
The index aims to track the performance of REITs and InvITs that are publicly listed and traded on the NSE, the exchange said in a statement.
A real estate investment trust (REIT) or an infrastructure investment trust (InvIT) is an investment vehicle that owns revenue-generating real estate or infrastructure assets.
REITs invest in real estate projects, whereas InvITs invest in infrastructure projects with a long gestation period. Through these trusts, investors get exposure to diversified regular income-generating real estate and infrastructure assets.
"REITs and InvITs are recognised as strong alternative financial instruments to raise funds against 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," NSE Indices CEO Mukesh Agarwal said.
The weights of securities within the index will be based on their free-float market capitalisation, subject to a security cap of 33 per cent each, and the aggregate weight of the top three securities is capped at 72 per cent.
The Nifty REITs and InvITs index has a base value of 1,000 and the index will be reviewed and rebalanced on a quarterly basis.