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The National Stock Exchange (NSE) has launched the country’s first index to track Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) - Nifty REITs and InvITs Index.
The Nifty REITs and InvITs index will track the performance of REITs and InvITs that are publicly listed and traded or not listed but permitted to trade on the bourse, the exchange said.
At present, there are three listed REITs and three listed InvITs. Blackstone sponsored Nexus Select Trust has filed its draft offer documents for an initial public offering of its REIT while Bharat Highways InvIT has also filed its draft papers for an IPO.
There are 20 InvITs registered with the Securities and Exchange Board of India and five registered REITs.
Harsh Shah, CEO, IndiGrid said about the Index launch, “Launch of a dedicated Nifty REITs & InvITs Index is a welcome development. We expect this index to act as a catalyst for Index Funds and ETFs participation in the space and increase fund flows. This is likely to also encourage passive investors, who typically choose index funds, to invest in an infrastructure linked stable yield platform. As the prominence of Business Trusts increases, we hope to also see inclusion of REITs and InvITs in the mainstream indices of stock exchanges.”
The weights of the securities within the index will be based on their free-float market capitalization subject to a security cap of 33 per cent each and the aggregate weight of the top three securities will be capped at 72 per cent.
The Nifty REITs & InvITs Index has a base date of July 01, 2019, and a base value of 1000.
REITs and InvITs are investment vehicles that own revenue-generating real estate or infrastructure assets.
Mukesh Agarwal, CEO, NSE Indices, said. “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,” he added
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