NSE launches REITs & InvITs index to track 6 securities; to help investors benchmark high yield investments

NSE Indices Limited, a subsidiary of the National Stock Exchange, launched India’s first-ever Real Estate Investment Trusts (REITs) & Infrastructure Investment Trusts (InvITs) Index called the Nifty REITs & InvITs Index on Monday, comprising six listed REITs and InvITs. The index will track the performance of publicly listed or traded REITs and InvITs at the National Stock Exchange. The securities’ weights within the index are based on their free-float market capitalization, subject to a security cap of 33% each. The aggregate weight of the top three securities is capped at 72%. The Nifty REITs & InvITs Index has a base date of July 1, 2019, and a base value of 1000. It will be reviewed and rebalanced quarterly.

According to data released by NSE, the Nifty REITs & InvITs Index’s price return has been -4.13% quarter-to-date (QTD), and the total return is -2.17% QTD. The one-year price return has been -8.97%, and the total return for the year is -1.74%. However, the index has shown a total return of 10.48% since inception including dividends, with a price return of 0.22% since its inception. The price-to-earnings (P/E) ratio of the index is 49.07; and its dividend yield is as high as 8.17%.

The index comprises three sectors: realty, power, and services. The realty sector has the highest weight, accounting for 57.52% of the index, followed by power with 35.61% and services with 6.87%. The Nifty REITs & InvITs Index comprises six companies: Embassy Office Parks REIT with a weight of 32.95%, POWERGRID Infrastructure Investment Ltd. with 20.27%, Mindspace Business Parks REIT with 15.35%, India Grid Trust with 15.34%, Brookfield India Real Estate Trust with 9.22%, and IRB INVIT Fund with 6.87%.

The launch of the Nifty REITs & InvITs Index provides investors with more options to diversify their portfolios and take advantage of the growth potential of the real estate and infrastructure sectors in India. Mukesh Agarwal, CEO of NSE Indices, said, “The launch of the Nifty REITs & InvITs Index aligns with NSE’s vision to provide market representative benchmarks for different asset classes. The index will track the performance of publicly listed REITs & InvITs and act as a benchmark for active funds.”