Hybrid Securities

In News 

• Recently, Sebi has set up an advisory committee on hybrid securities under KV Kamath on issues related to development and regulation of primary and secondary markets of hybrid securities in the country. 

Hybrid Security 

• It is a single financial security that combines two or more different financial instruments.
•  Hybrid securities, often referred to as “hybrids,” generally combine both debt and equity characteristics. 
• The most common type of hybrid security is a convertible bond that has features of an ordinary bond but is heavily influenced by the price movements of the stock into which it is convertible.
• They are bought and sold on an exchange or through a brokerage.

• REITs and InvITs are classified as hybrid securities and they are relatively new investment instruments in the Indian context but are extremely popular in global markets.
  • A REIT comprises a portfolio of commercial real assets, a major portion of which is already leased out, InvITs comprise a portfolio of infrastructure assets, such as highways and power transmission assets.

Source:IE