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Finance GlossaryReal Estate Investment Trust (REIT)
Real Estate Investment Trust (REIT)
Definition of Real Estate Investment Trust (REIT)
A Real Estate Investment Trust (REIT) is a company that owns, operates, or finances income-generating real estate, allowing investors to earn dividends from property portfolios without direct ownership. In India, REITs are listed on stock exchanges and must distribute at least 90% of taxable income as dividends. They provide liquidity, diversification, and exposure to commercial properties like offices and malls.
Related Terms
Holdings
Holdings are the financial assets in the portfolio of an investor or company. They can include stocks, bonds, derivatives, commodities, currencies, and more.
Accrued Expenses
An accrued expense is the cost that is incurred in the current accounting period but is due to be paid in the future.
More simply, an accrued expense is an unpaid bill due in the future for goods or services that have already been received by a company.
Accrued expenses show up as liabilities on a company’s books.
More simply, an accrued expense is an unpaid bill due in the future for goods or services that have already been received by a company.
Accrued expenses show up as liabilities on a company’s books.
Red Herring Prospectus
A Red Herring Prospectus (RHP) is a preliminary offer document filed with SEBI when a company plans to go public through an IPO, outlining the company’s business, financials, risks, management, and most issue details. It does not include the final offer price or the exact number of shares being issued. It is marked with a bold red disclaimer indicating that certain key information like price and share count is incomplete or subject to change, and it helps investors assess the company before subscription. Once the offer price and share details are finalised (usually after book-building), the final prospectus with complete priced details is issued for public use.
Equilibrium Price
Equilibrium price is achieved when the demand is exactly equal to the supply. It is a state where buyers and sellers have enough goods and services to meet each other’s demands - not more, not less. One could say that equilibrium price is a perfectly balance state in the market.
Over-Allotment Option
An Over-Allotment Option, often referred to as a Greenshoe option in the Indian primary market, gives the underwriters the right to sell more shares (usually 15%) over and above the original IPO size if there is strong demand. If the share price drops below the issue price, the underwriters can use the proceeds from the extra shares to repurchase shares in the open market for support. If the price goes up, they exercise the option and sell the extra shares to the market. This mechanism is regulated by SEBI in India, and the primary purpose is price stabilisation.
Cash Market
A cash market is a place where assets, goods, and services are bought and sold on the spot. That’s why it is also known as the “spot market”.
A stock market exchange like NSE or BSE is an example of a cash market as trades are settled on the spot at the spot price. Derivatives like futures are not a part of the cash market are trades are settled in the future.
A stock market exchange like NSE or BSE is an example of a cash market as trades are settled on the spot at the spot price. Derivatives like futures are not a part of the cash market are trades are settled in the future.
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