Reits Could Soon Feature In Nifty Equity Indices As NSE Revises Eligibility Rules

Real estate investment trusts (Reits) could soon find a place in Nifty equity indices after the NSE Indices revised its eligibility criteria to allow their inclusion, aligning its index methodology with the regulatory changes of the Securities and Exchange Board of India (Sebi).

In a press release issued on July 13, 2026, NSE Indices, a subsidiary of the National Stock Exchange (NSE), said Reits, which were earlier not eligible for inclusion in Nifty equity indices, will now be considered eligible. The revised rule will take effect from the next scheduled reconstitution of the respective Nifty equity indices. The next review for major indices, including the Nifty 50 and Nifty 500, is scheduled for September 2026.

“The Index Maintenance Sub-Committee (Equity) of NSE Indices has decided to revise the eligibility criteria for the inclusion of the stocks in the Nifty equity indices,” the exchange said. The decision comes after Sebi, through a circular dated November 28, 2025, reclassified Reits as equity-related instruments for mutual funds and specialised investment funds (SIFs), making them eligible to be considered for equity indices.

What Is A Reit

Reits are listed investment trusts that own and manage income-generating properties, such as office parks, shopping malls and commercial buildings. By buying Reit units on the stock exchange, investors can earn a share of the rental income and benefit from any rise in the value of these properties, without having to buy or manage real estate themselves.

How Reits Evolved Over A Decade

Here's a timeline of how Reits evolved in India, from their introduction to becoming eligible for inclusion in Nifty equity indices.

2014: Sebi introduced the regulatory framework for Reits and infrastructure investment trusts (InvITs), creating a regulated investment avenue for income-generating real estate and infrastructure assets. In 2019, Embassy Office Parks Reit became India’s first listed Reit.

2021: Sebi lowered the entry barrier for retail investors by reducing the minimum investment amount for Reits from Rs 50,000 and for InvITs from Rs 1 lakh to Rs 10,000-15,000. It also reduced the minimum trading lot from 100 units to one unit.

April 17, 2025: Sebi released a consultation paper proposing that Reits and InvITs be treated as equity-related instruments for mutual funds. It also invited public comments on allowing Reits to be included in equity indices, noting that Indian Reits were already part of global benchmarks, such as the MSCI India Small Cap Index and FTSE India Index.

October 31, 2025: Sebi amended the Mutual Fund Regulations to reclassify Reits as equity-related instruments.

November 28, 2025: A circular issued on November 28, 2025, said the change would take effect from January 1, 2026, however, InvITs would continue to be treated as hybrid instruments. It also stated that Reits could be considered for equity indices only after July 1, 2026.

July 13, 2026: NSE Indices revised the eligibility criteria for Nifty equity indices, making Reits eligible for consideration from the next scheduled index review, subject to the applicable index methodology.

Listed Reits In India

India currently has five publicly listed Reits. These are Embassy Office Parks Reit, Mindspace Business Parks Reit, Brookfield India Real Estate Trust, Nexus Select Trust and Knowledge Realty Trust.

What It Means For Investors

If Reits become constituents of Nifty equity indices, passive mutual funds, SIFs and exchange-traded funds (ETFs) tracking those indices may have to buy their units as part of portfolio replication.

That could also bring higher passive inflows into eligible Reits over time, potentially improving trading liquidity. However, the impact will depend on which indices include Reits and the weight they eventually receive.

However, the Inclusion is not automatic. Reits will still need to meet the eligibility requirements of the respective Nifty indices, including criteria, such as free-float market capitalisation, liquidity, and other index methodology norms.