NSE launches real estate, infrastructure focused index

NSE Indices Limited, a subsidiary of National Stock Exchange (NSE), on Tuesday launched India’s first ever Real Estate Investment Trusts (REITs) & Infrastructure Investment Trusts (InvITs) index named ‘Nifty REITs & InvITs’.

The Nifty REITs & InvITs index aims to track the performance of REITs and InvITs that are publicly listed and traded at the National Stock Exchange.

Real Estate Investment Trusts (REITs) are investment trusts like mutual funds that own and operate real estate properties generating regular income and capital appreciation on their investments.

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While Infrastructure Investment Trusts (InvITs) are also like mutual funds that pool money from investors that own and operate operational infrastructure assets like highways, roads, pipelines, warehouses and power plants.

The Nifty REITs & InvITs Index has a base date of July 01, 2019, and a base value of 1000. The index will be reviewed and rebalanced on a quarterly basis, NSE said in a statement.

The weights of securities within the index are based on their free-float market capitalisation subject to a security cap of 33 per cent each and aggregate weight of top 3 securities is capped at 72 per cent, it said.

Through REITs & InvITs 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 the cash generating infrastructure and real estate projects,” said Mukesh Agarwal, CEO, NSE Indices.

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 launch of the Nifty REITs & InvITs Index - India’s first ever REITs & InvITs Index aligns with NSE’s vision to provide market representative benchmarks for different asset classes,” Agarwal said.

The Nifty REITs & InvITs Index will track the performance of publicly listed REITs & InvITs and act as a benchmark for active funds.