Capital markets to play bigger role in funding economic growth: SEBI Chairman

Speaking on the IPOs, fundraising and disclosures, Mr Tyagi said that the success of IPOs from new-age tech companies will attract more funds and help create a new eco-system of entrepreneurs and investors.

Mr Ajay Tyagi, Chairman, Securities and Exchange Board of India (SEBI) today asserted that a large part of the non-banking financial intermediation is happening through the capital markets. “Going forward, the capital markets are going to play a bigger role in funding the economic growth,” he added.

Addressing virtually the 18th Annual Capital Markets Conference ‘CAPAM 2021 – Beyond India@75: Accelerating Growth Through Capital Market’, organized by FICCI, Mr Tyagi said that going forward the focus area for SEBI will be on strengthening the robustness of capital markets. “The household financial savings deployed in the securities market is rising and sustaining it will give a tremendous boost to both the capital markets and the economy,” he added.

Speaking on the IPOs, fundraising and disclosures, Mr Tyagi said that the success of IPOs from new-age tech companies will attract more funds and help create a new eco-system of entrepreneurs and investors. “SEBI is constantly reviewing the regime. The framework for minimum public shareholding was revised to make it easier for large companies to make an IPO. Focus on review of equity fundraising norms will continue in future and SEBI’s Primary Market Committee is deliberating if SPAC framework should be introduced in India. From raising through traditional equity and debt instruments, corporates have diversified into a large number of new instruments. As the market dynamics change, even more, innovative instruments are likely to appear,” added Mr Tyagi.

Highlighting the future plans, Mr Tyagi said that SEBI has been active in the efforts to strengthen the market and several reforms are in the pipeline. For the listing of Startups, a separate platform ‘Innovators Growth Platform’ was created. “For fundraising requirements of the social sector, we are in the process of setting up an entire eco-system called ‘Social Stock Exchange’,” he added.

On the issue of corporate governance, SEBI Chairman said that while independent directors have an important role, other directors should also play a more active role in company management. There is a need to continuously improve the corporate governance standards and transparency should come from within the company itself. “With the increased awareness and maturing of capital markets, well-governed companies carry the trust of investors and reap benefits in the long run. I urge FICCI to step up its efforts on corporate governance improvement of its members. If industry self-governs well, the need for the regulator to step in every time will not arise,” he emphasized.

Mr Vikram Limaye, MD & CEO, National Stock Exchange of India Limited said that the digital adoption and addition of new customers will continue on an accelerated trajectory in coming years. He further said that SEBI is working with other stakeholders to reduce the listing time further and it is expected to be reduced to 2-3 days.

Mr Uday Shankar, President of, FICCI said that that the capital market functioned smoothly despite the pandemic and the listing of new-age companies has brought depth to the market. “We need simplification of the listing process and should also create an efficient process for delisting,” he added.

Mr Rashesh Shah, Past President, FICCI and Chairman, Edelweiss Group said that the Indian market has got diversified and has got depth. “Glorious times for the Indian markets are ahead. We are transforming from a country of savers to a country of investors,” he added.

Mr Sunil Sanghai, Chairman, FICCI National Committee on Capital Markets and Founder & CEO, NovaDhruva Capital Pvt Ltd said that a structured private security market will be helpful. He also urged for creating a capital green market corridor which will be fruitful.

Mr Vijay Chandok, Co-Chair, FICCI Capital Markets Committee and MD & CEO, ICICI Securities Ltd said that we are working closely with SEBI to chart out the growth path for capital markets and ensure that it remains robust.