Indian Capital Market To Remain Buoyant In 2015

The Indian capital market is expected to remain buoyant in 2015. An ASSOCHAM study says that both equity and debt markets can expect stability in the New Year.

What would be the driving factors for the market, you may ask. DS Rawat, general secretary of the chamber, says “There are various factors, domestic and international which are extremely important and will determine the market trends for the coming year like global market movements; strengthening of the US dollar (USD) as well as Reserve Bank of India’s (RBI’s) action on interest rates and visible improvement in corporate earnings at the domestic level. Also overall positive shift in terms of Global markets will surely benefit the Indian equities market too,” The market can anticipate more movement in the primary market which includes both public issue and private placement of shares. Rawat says, “The primary market segment more specifically the IPO (Initial Public Offering) is expected to have good movement in the year 2015 following the good secondary market growth as well positive investor’s sentiments.”

He also emphasized on the pivotal role that market regulator SEBI plays in the larger picture. “The role of market regulator is also very important for the growth of a nation’s capital market. SEBI, lately as a proactive regulator, has cracked down heavily on errants without any fear. Lots of actions have been taken against large entities mobilizing illegal money as well as and further serious investigations as well as stringent actions are being taken cracking down entities involving into market manipulations as well as black money mobilization into the capital markets. The quantum of penalties too have been increased many folds,” said Rawat.

It should be noted that SEBI has cracked its whip on realty giant DLF as well as its top executives last year and barred it from entering the capital markets for three years for alleged bogus transactions as well as hiding information at the time of its Initial Public Offering (IPO).
However, the chamber was quick to note that SEBI should also have a balanced approach as over regulation and harsh punishments could upset India Inc. as well as the intermediaries in the market.

Apart from stricter regime by SEBI, the chamber highlighted that the introduction of new measures such as Real Estate Investments Trusts (REITs), Foreign Portfolio Investors (FPI) Regulations 2014 and Infrastructure Investment Trusts (InvIT) Regulations 2014, will also boost the movement in the capital markets.

It is worth noting that the total investments made by foreign investors under FPI between January 2014 and December 2015 is nearly $42 billion while $26.4 billion was invested in debt market and $16.40 billion were invested in the equities market last calendar year.

“During the Calendar year 2014 around Rs 39, 127 crore were raised in the Public Equity market. In the funds so raised, the substantial raising had been through QIPs with almost Rs 31, 684 crore being raised from institutional investors (almost 81% of the total fund raised in the capital market). Offers for Sale through Stock Exchanges (OFS) dropped to merely Rs 5,000 crore** in the calendar year as compared to the past year,” reveals the study.