NSE Indices Ltd, a subsidiary of the National Stock Exchange (NSE), has launched India’s first-ever Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) Index to track the performance of REITs and InvITs that are publicly listed and traded on the NSE.

REITs and InvITs are investment vehicles that own revenue-generating real estate and infrastructure assets, providing diversification and regular income. Mukesh Agarwal, CEO of NSE Indices, notes that REITs and InvITs offer exposure to real estate or infrastructure assets, diversification of risk, and regular income, making them a solid alternative financial instrument to raise funds against cash-generating infrastructure and real estate projects.

The Nifty REITs and InvITs Index tracks the performance of publicly listed REITs and InvITs, providing a market-representative benchmark for active funds. The index has a base date of July 1, 2019, a base value of 1,000 and will be reviewed and rebalanced quarterly. The weights of securities within the index are based on free-float market capitalization, subject to a security cap of 33% each. The average weight of the top three securities is capped at 72%.

Since its inception, the index has delivered a total return at a compounded annual growth rate (CAGR) of 10.48%, including dividends, with a price return of 0.22%. However, the index has shown negative total returns of 2.1% year-to-date and negative 1.7% in one year. The 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, weighing 57.5%, 35.6%, and 6.8%, respectively. It includes six companies: Embassy Office Parks REIT, POWERGRID Infrastructure Investment Ltd., Mindspace Business Parks REIT, India Grid Trust, Brookfield India Real Estate Trust, and IRB INVIT Fund, with weights of 32.95%, 20.27%, 15.35%, 15.34%, 9.22%, and 6.87%, respectively.