NSE Indices Ltd, which is a subsidiary of the National Stock Exchange (NSE), has introduced India’s inaugural index for Real Estate Investment Trusts (Reits) and Infrastructure Investment Trusts (InvITs).
The Nifty Reits and InvITs index has been created to monitor the progress of publicly traded and listed Reits and InvITs on the NSE. The index’s composition is determined by the securities’ free-float market capitalization, with each security limited to a maximum 33% weightage, and the total weightage of the top three securities limited to 72%.The Nifty Reits & InvITs Index started on 1 July 2019 with a value of 1,000. It will be reassessed and adjusted every three months.
Reits and InvITs are types of investments that possess real estate and infrastructure assets which generate income. These investment vehicles are suitable for individuals who want to earn a consistent source of income by investing in an assorted set of real estate or infrastructure assets.
According to Mukesh Agarwal, Reits and InvITs are considered attractive options for generating funds through infrastructure and real estate projects that generate cash. These instruments enable investors to have exposure to such assets while mitigating their risk by diversifying from traditional asset classes such as equity, debt and gold. Additionally, they provide a regular source of income, chief executive officer, NSE Indices.
The main components of the Nifty Reits & InvITs index are Embassy Office Parks Reit, which makes up 32.9% of the weighting, followed by Powergrid Infrastructure Investment at 20.2%, Mindspace Business Parks Reit at 15.3%, and India Grid Trust also at 15.3%.
