It has been an exceptional year for the Indian economy and capital markets. What could be termed as the most difficult times, the Indian economy in the June quarter saw a 23.9 percent drop in the GDP. The capital markets also reacted adversely in March 2020 following the declaration of the pandemic in India.
In his address at the 11th CII Financial Markets Summit, Securities & Exchange Board of India's (SEBI) Chairman Ajay Tyagi said that the market regulator took some timely surveillance measures with respect to exposures and margins to curb volatility.
Tyagi also added that the markets have recovered well since its March lows. The Sensex and Nifty are very close to their all-time high hit in January 2020. The volatility has also relatively stabilized.
Entering the debate on the disconnect between the market and the real economy, SEBI Chairman stated that the recovery in the market has been broad-based and SEBI’s analysis reflects this fact on three counts.
Firstly, it is not just the large-cap but also the mid and small-cap indices which have recovered. Secondly, the recovery is not only in the heavyweight stocks, but is across the board in the index and thirdly, the recovery is broad-based outside the indices as well.
According to SEBI Chairman, investor participation in the equity market is higher now than ever before. The average daily turnover in the cash market in this financial year is around Rs. 60,000 crore which is 54 percent higher than the figure of Rs 39,000 crore last year. The equity derivatives segment has also seen the average daily turnover grow by around 27 percent as compared to the last year.
To elaborate on the point of increasing investor participation, Tyagi said that during April- September 2020, 63 lakh new demat accounts were added as compared to 27.4 lakh accounts during the corresponding period last year.
On the FPI front, SEBI Chairman said that they have received around $11 billion of net FPI investments in the equity markets in current financial year. This at a time when most emerging markets have seen FPI outflows.
Speaking about the growth in Primary Markets, SEBI Chairman said that the total funds raised have touched Rs 1.54 lakh crore till September 2020 which is very close to Rs 1.58 lakh crore raised during the corresponding period last year.
He added that almost all of the IPOs, Rights Issues have been over-subscribed several times. According to Tyagi, further, more than Rs 22,000 crore equity issuances are in the pipeline.
On the debt side, the funds raised through corporate bonds this financial year till September 2020 are around Rs 3.8 lakh crore which is around 25 percent higher the funds raised in the corresponding period last year.
First Published: Oct 21, 2020 2:20 PM IST
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