Comparative Study of Nifty REIT & InvIT Stocks

Overview

Real Estate Investment Trusts (REIT) in India, also known as Infrastructure Investment Trusts (InvITs) are companies that invest in real estate to raise money for its investors or unitholders. 

REIT and InvIT are attractive options for the investors who seek to diversify their portfolio by exposing to real estate assets without owning the physical property.

Difference between REIT and InvIT

REITs are entities that invest its funds in owning, operating, financing of income producing real estates . whereas InvIT are entities that invest the funds in infrastructure projects such as roads, highways, power transmission lines etc... 

Salient Features of REIT-InvIt

Dividend Income: REITs and InvITs are mandated to distribute at least 90% of their income as dividends, making them attractive for income-seeking investors.

Liquidity: Being listed on stock exchanges, REITs and InvITs offer liquidity, allowing investors to buy and sell units easily.

Transparency: REITs and InvITs are regulated by SEBI (Securities and Exchange Board of India), ensuring transparency and investor protection.

Diversification: Investing in REITs and InvITs provides diversification benefits, as the underlying assets are spread across different properties or infrastructure projects.

How to Invest in REIT-InvIT

Selecting a REIT-InvIT: Research and select a REIT or InvIT based on its portfolio, track record, and financial performance.

Investing: Purchase units of the selected REIT or InvIT through a broker, similar to buying stocks.

Earning Returns: Earn returns in the form of regular dividends and potential capital appreciation as the value of the underlying assets increases.

Risks associated with REIT- InvIT Investment

Market Risk: The value of REITs and InvITs can fluctuate based on market conditions.

Interest Rate Risk: Changes in interest rates can impact the performance of REITs and InvITs.

Property/Project Risk: Specific risks related to the properties or projects owned by the REIT or InvIT, such as occupancy rates, rental income, etc.

Let's dive into a detailed comparative analysis of REIT_InvIT stocks. Ready to invest? Open your free demat trading account with Enrich Money today!"

Nifty Moves: A Detailed Analysis of REIT & InvIT Stocks

The main objective of Nifty REITs and InvITs index is to monitor the performance of REITs and InvITs  which are listed and traded on NSE or which are not listed on NSE but allowed to trade on NSE.

Nifty REITs and InvITs were traded since 1st July,2019 which is reconstituted and rebalanced on a quarterly basis. Nifty REITs and InvITs constitutes of 7 stocks namely,

Eligibility Criteria for Nifty REITs and InvITs stock

To be included in the Nifty REITs & InvITs index, stocks must meet the following eligibility criteria: 

• REITs or InvITs must be based in India and listed and traded on the National Stock Exchange.

• Only publicly listed securities with a market lot size of 1 unit are eligible.

• Securities must have a minimum listing history of 1 month as of the cutoff date.

• Securities must have a minimum trading frequency of 60% during the previous 3 months as of the cutoff date.

Performance of Nifty REITs and InvITs as on 30th April,2024

Source : https://www.niftyindices.com/

Nifty REITs and InvITs stocks represent stocks from Realty (70.40%), Power (24.62%) and Services (4.99%) sector. The Nifty REITs and InvITs index have provided a total return of 1.11 % on quarterly basis , 6.91% on year to date , 1 year return was 4.55% and total return since its inception was 10.47%. Nifty REITs and InvITs have a PE ratio of 32.51, PB ratio of 1.66 and provide a dividend yield of 7.03 %.

Comparative Analysis

Let’s consider the below three REIT stocks for comparative analysis.

• Embassy Office Parks REIT

• Brookfield India Real Estate Trust

• Mindspace Business Parks REIT

These stocks are evaluated based on their intraday price analysis, monthly price analysis, fundamental analysis , technical analysis and their future price target .

Intraday Price Comparative Analysis 

Based on the intraday price analysis, Mindspace Business Parks REIT are traded at price change of 0.89% .

Monthly Price Comparative Analysis

While observing the monthly stock price data, the stock price of Brookfield India Real Estate Trust REIT is in downtrend . whereas the stock price of Mindspace Business Parks REIT and Embassy Office Parks REIT are in uptrend. 

Chart Analysis

Embassy Office Parks REIT

Embassy Office Parks is India's first REIT, jointly owned by Embassy Group and Blackstone, with a portfolio of premium office spaces in cities like Bangalore, Pune, Mumbai, and Noida. It offers investors regular income through dividends and potential capital appreciation from its high-quality properties. As a pioneer in the Indian REIT market, Embassy Office Parks provides an opportunity to invest in the country's growing commercial real estate sector.

Bearish Initiation Candlestick pattern with spinning top is observed on daily charts with low volume. Also, the monthly price data indicates Bearish Initiation Heikin Ashi pattern.

Brookfield India Real Estate Trust REIT

Brookfield India Real Estate Trust (BIRET) is a real estate investment trust listed on the Indian stock exchanges. It owns a portfolio of office properties in major Indian cities, including Mumbai, Gurugram, Noida, and Kolkata. BIRET focuses on acquiring and managing high-quality, income-generating commercial real estate assets. Investors in BIRET benefit from regular dividends and potential capital appreciation. The trust is managed by Brookfield Asset Management, a global leader in alternative asset management.

Bullish Hammer candlestick pattern is observed on daily charts. Also, the monthly price data reveals candlestick patterns.

Mindspace Business Parks REIT

Mindspace Business Parks REIT is India's second REIT, listed on the stock exchanges, with a focus on high-quality office spaces. It owns a portfolio of business parks in key markets like Mumbai, Hyderabad, Pune, and Chennai. Mindspace Business Parks REIT provides investors with regular income through dividends and potential capital appreciation. Managed by K. Raheja Corp and Blackstone, it offers a diversified and stable investment opportunity in India's commercial real estate sector.

Bearish engulfing candlestick pattern is observed on daily charts . Also, the monthly price data reveals bearish candlestick patterns.

Fundamental Analysis

Embassy Office Parks REIT Ltd

Valuation - The stock is undervalued. And the book value of the stock has been in a downtrend in the last three years.

Profitability -The stock has a good piotroski score , with excellent EPS growth . The net profit margin is very good , which is in uptrend in the last three years. The company has a dividend yield of 0%.

Growth - The company has had a steady increase in sales and asset growth in the last three years.

Stability - The stock is high risk stock.

Brookfield India Real Estate Trust Ltd

Valuation - Shareholder's return score is very low. And the book value of the stock has been in a downtrend in the last three years.

Profitability - The profitability of the share is average.

Growth - The company has had good quarterly sales for the last five years. The short-term total sales and profit is in uptrend.

Stability - The company has an average stability.

Mindspace Business Parks REIT

Valuation -Shareholder's return score is very low. And the book value of the stock has been in a downtrend in the last three years.

Profitability - The stock has excellent EPS growth . The net profit margin is very good , which has been uptrend in the last 5 quarters. 

Growth - The share is in uptrend in short term sales and profit.

Stability - The company has excellent stability.

Technical Analysis

The Orca app from Enrich Money offers enhanced insights into stock momentum through its blend of technical and fundamental analysis.

Embassy Office Parks REIT Ltd

SMA and EMA Levels indicate that stock exhibits bearish  signal on short term period and bullish signal on long term period.

Based upon the pivot levels, fundamental and technical evaluation, we can infer that the stock price of Embassy Office Parks REIT Ltd is underpriced and the ratio analysis intimates that the company possesses good fundamentals. The technical indicators imply that the stocks would follow a bearish pattern.

Brookfield India Real Estate Trust REIT

SMA and EMA levels indicate that stock exhibits strong bullish signals.

Based upon the pivot levels, fundamental and technical evaluation, we can infer that the stock price of Brookfield India Real Estate Trust REIT is overpriced. Also, the technical indicators indicate that the stocks would follow a bullish pattern.

Mindspace Business Parks REIT 

SMA and EMA levels indicate that stock exhibits  bearish signals for short term and bullish  signals at long term period.

Based upon the pivot levels, fundamental and technical evaluation, we can infer that the stock price of Mindspace Business Parks REIT is overpriced and the ratio analysis intimates that the company possesses average fundamentals, also the technical indicators intimate that the stocks would follow a bearish pattern in forthcoming days.

The below chart exhibits the comparative technical analysis study of three Nifty REIT & InvIT stocks based on Moving average crossover signals and Relative strength index for a period of 6 months.

 

Conclusion

The comparison of three Nifty REIT & InvIT stocks through price change analysis, chart analysis, fundamental, and technical analysis reveals valuable insights. Each stock's performance can be assessed based on its historical price movements, chart patterns, fundamental indicators such as revenue and earnings growth, and technical indicators like moving averages and relative strength. Investors can use this comprehensive analysis to make informed decisions based on their investment goals, risk tolerance, and market outlook.

Utilizing the Orca app from Enrich Money for comparative analysis can offer deeper insights into stock momentum. It is crucial for investors to thoroughly evaluate both fundamental and technical factors before making investment choices, as this can help manage risks effectively and optimize returns.

Frequently Asked Questions

What are Nifty REIT & InvIT stocks?

Nifty REIT & InvIT stocks are securities that represent ownership in real estate and infrastructure projects, respectively. These stocks are listed and traded on the National Stock Exchange (NSE) of India.

How can I invest in Nifty REIT & InvIT stocks?

To invest in Nifty REIT & InvIT stocks, you need to have a trading and demat account with a registered stockbroker. You can then buy and sell these stocks through the NSE.

What factors should I consider when analyzing Nifty REIT & InvIT stocks?

When analyzing Nifty REIT & InvIT stocks, it's important to consider both fundamental and technical factors. Fundamental analysis involves evaluating the financial health and performance of the REIT or InvIT, while technical analysis involves studying historical price and volume data to forecast future price movements.

What are the risks associated with investing in Nifty REIT & InvIT stocks?

Like any investment, Nifty REIT & InvIT stocks come with risks. These include market risk, interest rate risk, liquidity risk, and specific risks related to the underlying real estate or infrastructure projects.

What returns can I expect from investing in Nifty REIT & InvIT stocks?

Returns from Nifty REIT & InvIT stocks can vary based on market conditions and the performance of the underlying assets. Generally, investors can expect to earn returns in the form of dividends and potential capital appreciation. 

Disclaimer: This blog is dedicated exclusively for educational purposes. Please note that the securities and investments mentioned here are provided for informative purposes only and should not be construed as recommendations. Kindly ensure thorough research prior to making any investment decisions. Participation in the securities market carries inherent risks, and it's important to carefully review all associated documents before committing to investments. Please be aware that the attainment of investment objectives is not guaranteed. It's important to note that the past performance of securities and instruments does not reliably predict future performance.