REITs To Become Eligible For Nifty Equity Indices After NSE Revises Inclusion Criteria

NSE Indices has updated its eligibility rules to allow Real Estate Investment Trusts (REITs) to be considered for inclusion in Nifty equity indices.

The change, approved by the Index Maintenance Sub-Committee (Equity) of NSE Indices, takes effect from the next scheduled reconstitution of the respective Nifty equity indices, with the next review for major indices, including the Nifty 50 and Nifty 500, due in September 2026. Until now, REITs were not eligible for any Nifty equity index.

What Led To The Change

The change follows the Securities and Exchange Board of India's (SEBI) circular dated 28 November 2025 that reclassified REITs as equity-related instruments for mutual funds and Specialised Investment Funds (SIFs).

With this regulatory change, NSE Indices has aligned its index methodology, and REITs are now eligible for consideration for equity index inclusion for the first time.

What Are REITs?

REITs are the listed investment trusts that own and manage income-generating properties such as office parks, shopping malls and commercial buildings.

Investors who buy REIT units on the stock exchange can earn a share of rental income and benefit from property value appreciation without owning or managing real estate directly.

India currently has five publicly listed REITs: Embassy Office Parks REIT, Mindspace Business Parks REIT, Brookfield India Real Estate Trust, Nexus Select Trust and Knowledge Realty Trust.

What This Means For Investors

Inclusion in Nifty equity indices is not automatic. REITs will still need to satisfy each index's eligibility requirements, including criteria covering free-float market capitalisation, liquidity and other methodology norms. Those that do qualify could be added to indices from the September 2026 reconstitution.

If REITs are added to Nifty equity indices, passive mutual funds, SIFs and exchange-traded funds tracking those indices may be required to hold REIT units as part of their portfolio replication. This could bring increased passive inflows into eligible REITs over time and improve trading liquidity, though the actual impact will depend on which indices include REITs and the weight each receives within the index.

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