Fundraising crucial to make India $5 trillion economy: Sebi chief
“For achieving the $5 trillion target, an increase in private investments is crucial,” Tyagi said, adding that fundraising can be done through various routes such as IPOs or debt market, and other hybrid modes.
Narendra Modi government plans to make India a $5 trillion economy by 2025.
Within the first five months of the current financial year, around Rs 1.4 lakh crore of equity has been raised, Tyagi pointed. He added that Sebi has been taking measures for boosting investor confidence and further refining the primary market framework.
Tyagi said though the money raised through IPOs has fallen, however, funds have been raised through other routes which include rights issue and Qualified institutional placement (QIPs).
“Robust financial sector which will continuously supply effective resources and efficiently allocate the same is crucial to create savings and investment cycle," he said.
The regulator will soon take a view on the rights issues and is in the process of further strengthening the framework for AIFs (alternate investment funds). The regulator also sees scope of further growth in the mutual fund industry.
Tyagi said in recent times rights issue has seen a pickup in the activity.
"Sebi had put up a consultative paper to reduce the timeline for rights issues. We will be soon taking a view on the subject,” Tyagi said.
Sebi expects the securities market to provide much-needed debt capital to the market. Tyagi informed that the government and regulators have been working to develop the bond market. He said the corporate bond market needs to expand to have a larger set of instruments, with different maturities and larger investor base. Tyagi informed SEBI is also in the process of developing an app based subscription to enable retail participation.
Tyagi also sees growth in the mutual fund industry in India, compared to global standards. The industry has been growing at a steady pace. He said the regulator is working with the industry to increase the penetration of mutual funds.
Mutual funds' asset base increased to Rs 25.49 lakh crore in April-June 2019, a rise of 4.14 per cent over the previous quarter, on the back of increased retail participation. The asset base of the industry, comprising 44 players, stood at Rs 24.48 lakh crore in the preceding three months, according to data by the Association of Mutual Funds in India (Amfi).