Mumbai: Announcing a slew of reforms in capital markets, regulator SEBI Tuesday said retail investors have begun coming in a big way and they can act as an effective 'counter-balance' to foreign investors.
Indian markets have been traditionally dependent in a big way on foreign investors, who own nearly half of all publicly traded shares in the country and have infused hundreds of billions of dollars.
SEBI today announced a number of reforms in IPO market and in other segments and also introduced a new regime for listing of start-ups to raise funds locally rather than going to foreign markets.
The regulator also halved the time period for a company to list after IPO to six days, from 12 days currently, while it expanded the fast-track route for raising funds through FPOs and rights issues to a larger number of companies.
At the same time, SEBI also tightened its noose on companies that tend to divert funds raised from public to other profit-making avenues, while it warned of strict action against those having failed to appoint at least one woman director on their boards.
Speaking to reporters after a meeting of SEBI's board, Chairman U K Sinha said the message is very positive on the participation of retail investors.
"If you look at the number of demat accounts that have been opened in last six months it is very heartening. If you look at the number of mutual fund and retail investors it is also very heartening.
"If you look at the equity money coming in mutual funds ... It is positive. If retail comes into the market then it will act as counter balance to foreign investors," he said.
On the new norms for every listed company to have at least one woman director, SEBI's Whole-Time Member S Raman said that the new regime has come into effect from April 1 and the companies that failed to comply will face penal action.
As per SEBI's directions, the stock exchanges would begin levying monetary penalties starting end of the current quarter, ending June 30, while other penal measures would be taken for those continuing to remain in default.
Welcoming various measures announced by SEBI today, leading exchange BSE's MD and CEO Ashishkumar Chauhan said, "E-IPO will substantially bring down the time to list the company."
"Besides, the new start-up platform will ensure that the Indian start-ups prefer to list on Indian exchanges instead of going to foreign exchange," he added.
NSE's Chief Regulatory Officer V Narasimhan said, "The reduction in IPO time is a very good example of positive exploitation of banking and trading technology for common good. Primarly market investors will definitely welcome this move."
