Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts will be integrated in the Nifty indices from September 30, according to new eligibility criteria announced by the NSE.
Vinod Rohira, CEO, Mindspace Business Parks REIT referred to as it a quite encouraging step from NSE.
“This would enable wider investor participation in REITs and consequently increased volumes, liquidity and better price discovery. REITs merit to be on the Nifty indices, and this move will assist in widening investor participation for REITs at par with other equity options in India,” he added.
In a statement on Monday, the exchange stated all equity shares, REITs and InvITs that are traded (listed and traded and not listed but permitted to trade) at the NSE are eligible for inclusion in the Nifty indices.
Under the existing guidelines, only shares traded on NSE are eligible for inclusion in the Nifty indices.
REITs and Infrastructure Investment Trusts (InvITs) are somewhat new investment instruments in the Indian context but particularly well-liked in international markets.
While an REIT comprises a portfolio of industrial actual assets, a main portion of which are currently leased out, InvITs comprise a portfolio of infrastructure assets such as highways, energy transmission assets.
As at March-finish, total 15 InvITs and 4 REITs have been registered. Of these, six InvITs and 3 REITs have been listed on the stock exchanges.
These investment cars collectively raised close to Rs 55,000 crore in 2020-21, taking their net assets to Rs 1.64 lakh crore.
The funds have been raised via initial give, preferential concern, institutional placement and rights concern.
In addition, the eligibility criteria for Nifty pharma index has been revised.
In the semi-annual critique of indices, Bank of Baroda, Cholamandalam Investment Fin Co, Jindal Steel & Power, PI Industries and Steel Authority of India Ltd (SAIL) will be integrated in the Nifty Next 50 index.
Abott India, Alkem Labs, MRF, Petronet LNG and United Breweries will be dropped from the Nifty Next 50 index.
Apart from Nifty Next 50, modifications have also been made in quite a few indicies like Nifty 500, Nifty one hundred, Nifty Midcap 150 and Nifty Smallcap 250.
The index upkeep sub-committee of NSE Indices has decided to make the modifications in eligibility criteria of Nifty indices and replacement of stocks in many indices. These modifications will turn out to be effective from September 30, 2021.