Context:
Recently, NSE Indices Ltd, a subsidiary of the National Stock Exchange (NSE), launched India’s first-ever Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) Index
Relevance:
GS III: Indian Economy
Dimensions of the Article:
- What is the REITs and InvITs Index?
- What are REITs?
- What are InvITs?
What is the REITs and InvITs Index?
- The REITs and InvITs Index tracks the performance of publicly listed and traded REITs and InvITs on the NSE.
- The index’s base year is 1 July 2019, and it will be reviewed and rebalanced every quarter.
- The index’s securities’ weights are determined based on their free-float market capitalization, with a security cap of 33% each, and the top three securities’ combined weight is capped at 72%.
- The Nifty Reits & InvITs index’s top constituents include Embassy Office Parks REIT and Powergrid Infrastructure Investment.
What are REITs?
- Companies that own, operate, or finance income-generating real estate.
- Publicly traded like stocks, making them highly liquid.
- Modeled after mutual funds, pooling the capital of numerous investors.
- Enables individual investors to earn dividends from real estate investments without the need to buy, manage, or finance any properties themselves.
What are InvITs?
- Mutual fund-like institutions that allow investments in the infrastructure sector by pooling small sums of money from individual investors.
- Set up as a trust and registered with SEBI.
- Composed of four parties: Trustee, Sponsor(s), Investment Manager, and Project Manager.
Source: Live Mint
