Today September 26, 2019 Mumbai GPN: Ajay Tyagi, Chairman, Sebi During FICCI’s 16th Annual Capital Market Conference – CAPAM 2019’ at Trident Hotel Nariman Point ,Mumbai.-Photo By Sachin Murdeshwar GPN

MUMBAI, 26 SEPTEMBER 2019 (GPN): Mr Ajay Tyagi, Chairman, Securities and Exchange Board of India (SEBI) today said that the equity market in India is world class in terms of regulatory framework for primary as well as secondary markets, trading volumes, debt and liquidity. “The market is fully geared up for meeting the requirements of a 5 trillion economy,” saidMr Ajay Tyagi.

Speaking at the ‘16^th Annual Capital Market Conference – CAPAM 2019’ on the theme of ‘Building A US$ 5 Trillion Economy’, organized by FICCI, Mr Tyagi said that a robust financial sector is crucial for creating a savings and investment cycle. Private investments are very important; hence fund-raising activities must pick up. This could be either by way of equity, debt or hybrid instruments. SEBI is taking measures to boost investor confidence, he said.

“A framework can only be as robust as the enforcement of its provisions. SEBI has been enforcing many of the regulatory requirements through a standard operating procedure implemented by the stock exchanges,” Mr Tyagi added.

Mr Tyagi further added that there is a conscious effort to move from bank credit to other forms of credit.  For this, securities markets will have to step up and provide the much-needed debt capital. The Government and regulators have been taking measures to develop the bond market. Corporate bond market needs to expand to cover a wider set of investors. “As of now, the corporate bond market is dominated by issuers with ratings of AA and above,” he said.

The Government is also taking steps to rationalize the regulations required to raise funds in municipal bonds. As of now, only seven municipalities have raised these bonds, Mr Tyagi said.

“Infrastructure and real estate are two sectors where the spill over to the other sectors of the economy is the highest,” he said. The budget 2019-20 had announced that the Government would invest Rs 100 lakh crore in infrastructure in the next five years. This is almost double the existing investment. But the share of private sector investment needs to increase substantially, added SEBI Chairman.

“REITS and InvITS are vehicles through which the funds deployed in completed projects could be provided an exit which in turn could be recycled into new and under-construction projects,” said Mr Tyagi.

Mr Tyagi pointed out that robust secondary markets are necessary for a strong primary market. He informed that SEBI is reviewing the framework regarding promoters and may align the framework with the international norm of ‘controlling shareholders’. SEBI is also in the process of introducing an app-based subscription mechanism to facilitate retail participation. Other investment instruments include mutual funds, and alternative investment funds.

Mr Rashesh Shah, Immediate Past President, FICCI, and Chairman and CEO, Edelweiss Group, described the investor mood as ‘upbeat’. “The sentiment had changed over the last few months and received a push with the Government’s focus on reducing income tax and providing a fiscal stimulus. It is now up to us to capture the opportunity,” he said. He lauded SEBI’s impact on capital markets over the last 25 years.

Mr Sunil Sanghai, Chairman, FICCI National Committee on Capital Markets and Founder & CEO, NovaDhruva Capital Pvt. Ltd. said, “I have absolutely no doubt, given the growth of the capital market, our equity capital market is really up there in terms of growth, hard  infrastructure and soft infrastructure.” He further added that ‘hard infrastructure’ has evolved from manual documentation to trading at the click of a button. “We execute almost the largest volume in the world.” Likewise, ‘soft infrastructure’ had improved significantly over the last three years, he said.

He further said that the Government’s announcement of credit enhancement would go a long way in helping the bond market.