The Securities and Exchange Board of India (Sebi) has set up an advisory committee on hybrid securities to promote growth and innovation in this sector.
Hybrid securities are relatively new in the Indian markets, but highly popular in the West. Real estate investment trusts (ReITs) and infrastructure investment trusts (InvITs) are some of the hybrid securities issued till now in India.
According to Sebi, the new committee will be chaired by KV Kamath, chairperson, National Bank for Financing Infrastructure, and it will undertake a slew of measures to focus on the ease of issuing these hybrid securities, as well as attracting both domestic and global retail and institutional participation in the sector.
Typically, REITs invest in a portfolio of commercial real estates, such as office parks, among others. InvITs, on the other hand, invest in a portfolio of infrastructure assets, such as roads, highways, power, transmission and similar other kind of assets.
What Will The Committee Do?
The new committee includes experts from various fields, namely the top-level officials of various InvITs, REITs, finance and legal experts, as well as representatives from Sebi.
The 20-member strong committee, includes among others, Harsh Shah, CEO and whole-time director, India Grid Trust; Sanjay Grewal, CEO and executive director, Virescent Renewable Energy Trust; Tushar Kawedia, CFO, IRB Infrastructure Developers; Mathew George, CFO, National Highways Infra Investment Managers; Preeti Chheda, CFO, Mindspace REIT; and Aravind Maiya, CFO, Tata Realty and Infrastructure.
Development: One of the first tasks of this committee is to advise Sebi on issues related to the development and regulation of the primary and secondary markets of hybrid securities. Apart from this, the committee will identify various use case scenarios of hybrid securities, and specifically in the context of infrastructure financing, and development of new instruments to meet the growing demands of the sector. This committee will also make recommendations on infrastructure financing through capital markets.
Retail Awareness: The committee has also been tasked with making suggestions to entail greater retail investor participation in hybrid securities as well as create more awareness about the same. That said, the committee will also ensure that the interests of investors are protected at all times.