Last week in a nutshell
“Total value of REITs and InvITs would soon match the country's GDP”, said the chief of SEBI. Should you take this with a pinch of salt? Keep scrolling to know more 👇
Reliance bought Paramount Global's entire 13.01% stake in Viacom18 Media for $517 million, increasing their ownership to 70.49%. Paramount will continue to license content to Viacom18 and JioCinema.
Paytm payments bank to cut down about 20% of the staff. Due to legal concerns, Paytm's banking division might cease operations, and in planning, the company plans on firing 20% of its workforce.
Small Cap Funds are facing scrutiny for taking up to 32 days to liquidate just 50% of its portfolio. If an equity fund takes longer than the usual two to three days to return investors' money, it could suggest stress in the fund's portfolio. This concern emerged amidst a regulatory directive from SEBI, which mandated stress tests for mutual fund liquidity.
What are REITs & InvITs ?
Inflow in small-cap funds in India jumped by 86.5% over a 10-month period to ₹2.48 trillion in January and mid-cap funds jumped 58.5% to ₹2.9 trillion. In the last year, the Indian market witnessed a record rally driven by small-cap and mid-cap funds. Funds focused on this saw a remarkable 67% surge in assets, reaching 5.3 trillion last month as compared to the previous year.
SEBI is concerned about the “froth in the market”. Small-cap funds added 78 new stocks to their portfolio, taking the total to 506 by the end of December. This is an increase from 428 in December 2022, as inflows and returns have risen significantly - a serious overheating sign.
SEBI has given suggestions like slowing down investments and protecting investors from sudden withdrawals. But it's up to the funds to decide what to do. They've got 21 days to figure it out.
What our expert says
"Investing in REITs and InvITs can be a wise choice given the current scenario in India. With SEBI encouraging investors and EPFO considering investments, these assets could see increased liquidity and valuation. They offer regular income, diversification, and regulatory transparency. However, considering their limited track record, it's advisable to allocate a moderate portion (5-10%) of your portfolio to them, depending on your risk tolerance and investment goals."
—Kashish Manjani, Investment Head at Stack Wealth
