NSE’s index services subsidiary, NSE Indices Ltd, on Tuesday, launched India’s first-ever Real Estate Investment Trusts (REITs) & Infrastructure Investment Trusts (InvITs) Index - Nifty REITs & InvITs Index.

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The Nifty REITs & InvITs index aims at tracking the performance of REITs and InvITs that are publicly listed and traded at the National Stock Exchange, according to a statement by NSE Indices.

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. 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, power plants, etc. They offer regular income (via dividends) and long-term capital appreciation.

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"The launch of the Nifty REITs and InvITs Index - India’s first ever REITs and InvITs Index aligns with NSE’s vision to provide market representative benchmarks for different asset classes. The Nifty REITs and InvITs Index will track the performance of publicly listed REITs and InvITs and act as a benchmark for active funds," said Mukesh Agarwal, CEO, NSE Indices.

NSE Indices further said that the weights of securities within the index are based on their free-float market capitalisation subject to a security cap of 33 percent each and aggregate weight of top 3 securities is capped at 72 percent.

Meanwhile, the Nifty REITs & InvITs Index has a base date of July 1, 2019, and a base value of 1000. The index will be reviewed and rebalanced on a quarterly basis, NSE Indices added.

"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," Agarwal added.

NSE Indices Limited, set up in 1998, is a subsidiary of the National Stock Exchange of India. It provides a variety of indices and index related products and services to Indian capital markets. It is based in Mumbai, Maharashtra. NSE Indices Ltd. operates as a subsidiary of NSE Strategic Investment Corporation Limited.

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First Published:Apr 11, 2023 3:01 PM IST