SEBI is en­gag­ing with MFs post debt cri­sis: Tyagi

The Hindu Business Line - - MARKET RADAR -

SEBI is in talks with the do­mes­tic fund in­dus­try for im­prov­ing norms and help­ing them deal with con­ta­gion fears em­a­nat­ing from the liq­uid­ity-cri­sis-hit non­bank­ing fi­nance com­pa­nies this year, Chair­man Ajay Tyagi said. On Fri­day, Tyagi, who was a key­note speaker at the CII con­fer­ence in Mumbai, also ex­pressed sat­is­fac­tion at the re­silience of In­dia’s cap­i­tal mar­ket de­spite the global volatil­ity.

“In terms of volatil­ity and in­dices’ re­turn, In­dian mar­kets have not per­formed much worse. In fact, they have been bet­ter off when you com­pare with ei­ther ma­jor de­vel­oped economies or emerg­ing mar­kets,” Tyagi said.

He said global cap­i­tal mar­kets have been quite volatile in the cur­rent year and are likely to re­main so due to un­cer­tainty in oil prices, the move to­wards more (from left) Leo Puri, Chair­man, CII Na­tional Com­mit­tee on Fi­nan­cial Mar­kets; Ajay Tyagi, Chair­man, SEBI; and Uday Ko­tak, Pres­i­dent Des­ig­nate, CII, and MD & CEO, Ko­tak Mahin­dra Bank, re­leas­ing the CII Re­port at the CII Na­tional Fi­nan­cial Mar­kets Sum­mit 2018, in Mumbai, on Fri­day

for­mal mon­e­tary poli­cies by cen­tral banks across ju­ris­dic­tions, and the US-China trade spat. These fac­tors have also af-

fected the In­dian mar­kets. Cit­ing some data, he said, in AprilNovem­ber re­turns on Nifty have moved up by about 6.5 per cent.

He said on the do­mes­tic front, NBFCs and HFCs have been fac­ing tight liq­uid­ity since Septem­ber, though it has im­proved on ac­count of steps taken by the RBI to pro­vide sys­temic liq­uid­ity.

Talk­ing to re­porters later, Tyagi said SEBI is also in con­sul­ta­tions with the mu­tual fund in­dus­try for changes post the liq­uid­ity cri­sis.

“We would grad­u­ally take ac­tion on that. On any of the pol­icy is­sues we are ex­am­in­ing, in con­sul­ta­tion with the in­dus­try, we will grad­u­ally take ap­pro­pri­ate ac­tion,” he said.

₹8.8-tril­lion mop-up

He said a record amount of ₹8.8 lakh crore was raised from the do­mes­tic cap­i­tal mar­ket dur­ing 2017-18 (through eq­uity and debt) against the ₹7.7 lakh crore raised dur­ing 2016-17. In the cur­rent fis­cal ₹4.85 lakh crore has al­ready been raised.

Tyagi said the de­vel­op­ment of other al­ter­na­tive sources of fund­ing such as AIFs, REITs, In­vITs and mu­nic­i­pal bonds have also been grad­u­ally gain­ing promi­nence over time and there has been a spurt in AIF ac­tiv­i­ties in the past two to three years, with cu­mu­la­tive com­mit­ment go­ing up by 117 per cent from March 2016 to March 2017 and fur­ther by 96 per cent March 2017 March 2018.

Tyagi said the reg­u­la­tor is in touch with mar­ket par­tic­i­pants and if any fur­ther changes are war­ranted re­lat­ing to REITs, In­vITs, or mu­nic­i­pal bonds, ap­pro­pri­ate ac­tion would be taken.

“A vi­brant cap­i­tal mar­ket has to play an in­creas­ingly piv­otal role to fa­cil­i­tate fund mo­bil­i­sa­tion for sus­tain­ing In­dia’s pro­jected eco­nomic growth mo­men­tum. This role be­comes even more im­por­tant, given the stress on the bank­ing sec­tor,” Tyagi said.

SHASHI ASHIWAL

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