NEW DELHI: On Tuesday, NSE Indices Ltd., a division of the National Stock Exchange (NSE), unveiled the Nifty REITs and InvITs Index, the nation’s first-ever Real Estate Investment Trusts and Infrastructure Investment Trusts index.
According to a statement from the exchange, the index will monitor the performance of publicly traded REITs and InvITs on the NSE.
An investment vehicle that owns real estate or infrastructure assets that generate income is a real estate investment trust (REIT) or an infrastructure investment trust (InvIT).
While InvITs invest in infrastructure projects with a long gestation period, REITs invest in real estate projects. Investors gain access to a variety of regularly income-producing real estate and infrastructure assets through these trusts.
“In order to raise money for cash-generating infrastructure and real estate projects, REITs and InvITs are recognised as powerful alternative financial vehicles. These products give investors exposure to real estate or infrastructure assets, provide risk diversification from more common asset classes like stock, debt, and gold, and produce consistent income “Mukesh Agarwal, CEO of NSE Indexes, said.
The weights of the securities in the index will be determined by their free-float market capitalization, with a cap of 33% on each security’s weight and a maximum of 72% on the combined weight of the top three securities.
The base value of the Nifty REITs and InvITs index is 1,000, and the index is evaluated and rebalanced every three months.