REITs & InvITs: Whats new in the Indian Stock Markets?

 

This page is about the new book by Gaurav Jain:

Click here to buy book from Amazon India Website  

Click here to see description of each chapter of book 

BRIEF DESCRIPTION OF THE BOOK

This book follows the author’s earlier book named “Real Estate Investment & Financial Analysis” (REIFA). REIFA, an awarded book (awarded "Best Books of All Time" by BookAuthority) and a bestseller in its category in India, was meant for readers interested in a perspective on financing and related analysis of real estate investments. It covered a wide variety of topics and had a real-estate-centric approach.

The present book is focused on REITs and InvITs, which have recently been listed in Indian stock markets. These are extremely lucrative, globally-accepted investment avenues, but are still highly unexplored in the Indian scenario.

Although REITs and InvITs are relatively new instruments for Indian stock markets, they have the potential of generating excellent returns for investors, as has been proved in matured markets around the world. REITs and InvITs, are acronyms for “Real Estate Investment Trusts” and “Infrastructure Investment Trusts”, respectively. These investment vehicles offer investors both categories of investment– a slice of the capital markets and a slice of the real estate markets. InvITs may be considered as part of REITs, as in many other countries, but in India a separate set of guidelines exists for the two.

REIT units are often referred to as debt-like in nature. But is it really true? What if this single investment gives returns in the form of dividends, interest and rentals? What if there is also scope for appreciation of the units like equity stock?

These listed financial instruments are now available to the Indian investor. They can be used in an effective manner in the portfolio, for generation of high yields combined with stability and investors also have a chance to gain from their capital appreciate in future. “REITs and InvITs: What’s new in the Indian stock markets” is a primer of these unique as well as very interesting financial instruments for real estate assets

Chapter 1: What are REITs?       

Introduction to the concept of REITs and InvITs, the acronyms for “Real Estate Investment Trusts” and “Infrastructure Investment Trusts”, respectively. These investment vehicles offer investors both categories of investment– a slice of the capital markets and a slice of the real estate markets. Since it is a relatively new concept in India, the first chapter touches on a few related topics to quickly answer some preliminary questions that a reader seeks. The sub-topics here necessarily require more detailed explanations, which are carried out in the subsequent chapters.

 

Chapter 2: REITs and Real Estate Assets 

The first few sub-topics of the chapter explore the rationale for real estate investing and also caveats for the same. An understanding of the basic features of real investment impacting finance and investment decisions is intended in this part. To gain a macro viewpoint of property investing, property-level analysis is taken up here. Topics such as the basic features, pros and cons of property investing, the REIT route to such investing, etc. are covered. The latter part of this chapter answers an important question namely “How is financial analysis for realty assets different from other asset analysis?”  This is done, as in any financial analysis, the core of all such analysis being risk and return. These measures are best represented with numbers using financial and statistical tools.

 

Chapter 3: REITs & Other Financial Instruments

REITs instruments’ financial aspects are covered here and elaborated here are differences between ‘REIT investment instruments’ and other financial instruments in the capital markets such as equity, debt, mutual funds, ETFs, etc.  However, the chapter begins at the level of property investing where it tries to seek out the replication feature of direct property investment in REIT instruments. Thereafter it moves on to the intended comparison with the financial instruments. This sequence enables the linkage of the ‘real estate offering’ and ‘financial offering’ feature of the instruments.

 

Chapter 4: REITs & InvITs in India         

This chapter explores the recent ways of financing real estate that has emerged in India, where many investors get together and invest money, taking the help of investment vehicles and instruments, through capital markets. In the case of real estate (a non-divisible asset), these newer financial avenues make it possible for investors to have a smaller ticket size where the ownership is defined by his or her fractional investment. The financial innovations make investments liquid, in varying degrees, depending on the structure opted for by investors. Additionally, a broad view of the Indian market scenario as well as a comparative worldwide analysis is presented to gain a holistic understanding in the Indian contextt

 

Chapter 5: Legal Structure, Guidelines and Taxation                

REIT and InvITs have to meet several requirements to qualify as REITs or InvITs. SEBI lays down many details for their operations such as conditions for investment, distribution of proceeds to unit-holders, rules for valuation of assets, or even the listing on the stock exchange.  This makes the investing environment much more transparent as well as safe for investors who were earlier exposed to the unorganized and non-transparent ways of the realty sector.  Also, taxation for these instruments is different and dependent on many factors because distribution of income may be categorized as capital gains, interest, or dividends.

 

Chapter 6: Investing in REITs or InvITs             

The earlier chapters sought to provide an understanding of REITs and InvITs from various perspectives to give the basis for REIT and InvIT investments. The present chapter suggests the actual process of working out an investment decision.  The approach suggested is a qualitative and quantitative approach. The chapter discusses valuation of REITs units also. The investment methodology incorporates a mix of macro and micro factors’ evaluation for a REIT investment.

 

Chapter 7: The Future of REITs/ InvITs in India                      

This chapter elaborates various issues which will be of significance for a deeper analysis of REITs, specifically considering the shape of things in future with regard to REITs environment. It covers the scope of these financial vehicles and places some ‘guesstimates’ (a combination of a guess + an estimate) to unveil in some manner, what may lie in store for India regarding REITs and InvITs

 Links to :

1. Table of Contents from the book  

2. Book Description, Chapterwise