Headwinds could likely come from the emerging macroeconomic scenario, which, in turn, would depend on the extent of control over the spread of the COVID-19 virus, SEBI Chairman Ajay Tyagi said Thursday.
Noting that the predominantly high price-to-earnings (P / E) ratios had bet on improved earnings going forward, he said that a crucial factor would be how excess liquidity in the system would be managed by banks. central banks around the world, including the timing and pace of the process.
“The level of inflation is another factor to watch. Given the uncertainty, it is difficult to predict the inflection point, ”he said during a speech at the CII summit on financial markets.
Noting that the capital markets had performed “quite well” during the pandemic and had helped both investors and businesses, he said it was important for investors to be aware of the risks involved in investing.
“Companies, on the other hand, must maintain high standards of corporate governance. The markets, especially the bond market, need to grow much more to meet the financing needs of the economy, ”he said.
Mr Tyagi said that after the start of the pandemic, the participation of individual investors in Indian stock markets has increased.
In FY20, on average, 4 lakh new demat accounts were opened each month. This tripled to 12 lakh per month in fiscal year 21 and increased further to around 26 lakh per month in the current fiscal year.
“The average share of individuals in the daily cash market turnover was 39% in 2019-20. It has increased to around 45% in 2020-2021 and 2021-2022,” he said.
Personal holdings in listed companies fell from 8.3% at the end of the first quarter of FY20 to 9.3% at the end of the first quarter of FY22, he added.
“If we see the SIP figures, while around 51 to 53 lakh SIP has been added in the last two fiscal years, about 59 lakh has been added in the first five months of this fiscal year itself,” pointed out the head of SEBI.
He said India still has a long way to go to deepen the participation of domestic individual investors in capital markets.
Highlighting the growth in capital markets turnover, he said that the average monthly turnover of the equity spot market increased from 8 lakh crore in FY20 to ₹ 13.7 lakh crore in FY21, and to over ₹ 15 lakh crore this fiscal year through August.
On the equity derivatives side, the corresponding turnover was 287 lakh crore, 565 lakh crore and around 1,084 lakh crore, respectively, during this fiscal year until August, he added.
“Overall, an increase of over 90% in equity spot market revenue and over 270% in equity derivatives revenue over the past one and a half years has significantly increased the depth of the market, ”he said.
He said funds raised through IPOs more than doubled in FY21 to around 46,000 crore, from around Rs.21,000 crore in the previous fiscal year. “In the current fiscal year, in just five months to August, the amount raised is already close to that raised during the entire previous fiscal year,” he said.
“Based on claims filed with SEBI, fundraising through IPOs this year is likely to exceed the highest amount ever raised in any fiscal year over the past decade.” , did he declare.
Growth-oriented tech companies have raised around 15,000 crore through IPOs over the past 18 months, Tyagi said, adding that their SEBI filings currently show a pipeline of around 30,000 crore. .
He pointed out that InvITs and REITs have become very popular in recent years for fundraising and monetizing infrastructure and real estate assets.
As of August 31, 15 InvITs and 4 REITs were registered with SEBI. He said the cumulative value of the assets under them increased from around 1 lakh crore on March 31, 2020 to ₹ 3.4 lakh crore on March 31, 2021 and then to ₹ 3.52 lakh crore on August 31.
He also said that the more than 700 Alternative Investment Funds (AIFs) registered with SEBI saw their cumulative investments increase by 33% in one year to around ₹ 2 lakh crore.
“With the potential to attract a lot of capital, AIFs may be a suitable vehicle for channeling funds from sophisticated investors, both individual and institutional, to purchase distressed loans from banks and NBFCs,” he said. -he declares.
“This would unlock the capital of banks and NBFCs and make it available for new loans. A new sub-category of AIF could be created for this purpose, ”he added.