REITs, InvITs to be included in Nifty indices from September 30: NSE

Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts will be included in the Nifty indices from September 30, according to new eligibility criteria announced by the NSE.

Vinod Rohira, CEO, Mindspace Business Parks REIT called it a very 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 said 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 current rules, only shares traded on NSE are eligible for inclusion in the Nifty indices.

REITs and Infrastructure Investment Trusts (InvITs) are relatively new investment instruments in the Indian context but extremely popular in global markets.

While an REIT comprises a portfolio of commercial real assets, a major portion of which are already leased out, InvITs comprise a portfolio of infrastructure assets such as highways, power transmission assets.

As at March-end, total 15 InvITs and four REITs were registered. Of these, six InvITs and three REITs were listed on the stock exchanges.

These investment vehicles collectively raised close to Rs 55,000 crore in 2020-21, taking their net assets to Rs 1.64 lakh crore.

The funds were raised through initial offer, preferential issue, institutional placement and rights issue.

In addition, the eligibility criteria for Nifty pharma index has been revised.

In the semi-annual review of indices, Bank of Baroda, Cholamandalam Investment Fin Co, Jindal Steel & Power, PI Industries and Steel Authority of India Ltd (SAIL) will be included 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, changes have also been made in several indicies including Nifty 500, Nifty 100, Nifty Midcap 150 and Nifty Smallcap 250.

The index maintenance sub-committee of NSE Indices has decided to make the changes in eligibility criteria of Nifty indices and replacement of stocks in various indices. These changes will become effective from September 30, 2021.