Large Flow of Retail Investors in India Has Had a Stabilizing Effect on the Markets: Ananth Narayan G, SEBI WTM at CII GEPF
“The large flow of retail investors in India has had a stabilizing effect on the Indian markets. The rise of retail investors in the financial markets has sustained the capital formation cycle in India,” said Shri Ananth Narayan G, Whole-Time Member of the Securities and Exchange Board of India (SEBI), during the session on ‘Financing Future Growth’ at the Global Economic Policy Forum 2024, organized by the Department of Economic Affairs, Ministry of Finance, Government of India, and the Confederation of Indian Industry (CII) today.
He further added that, over the last few years, the ecosystem has done a tremendous job of drawing in fresh participants into the capital formation cycle, with the number of investors increasing at an accelerating rate. He also highlighted that the volatility of Indian markets has been relatively low, making the country attractive to foreign investors. Additionally, he emphasized that monetizing existing infrastructure, improving efficiency, increasing transparency, and reducing risk are essential to ensuring sustained capital formation in the Indian markets. He also urged the Industry and CII to collaborate on areas like asset valuation and to be part of advisory committees that consult SEBI as a regulator on Type 1 and Type 2 errors.
“SBI’s customer base is a reflection of the demography of India,” said Shri C. S. Setty, Chairman of the State Bank of India. He elaborated on how the financialization of savings from the banking sector is flowing into other investment opportunities, ensuring that India is well-positioned as an investment destination. He also highlighted how UPI has transformed the way people transact today: “40% of DBT beneficiaries transact through UPI, showcasing tremendous adoption of the digital payments system.” He further reiterated that the strong balance sheet of banks enables them to fund the growth prospects of the economy.
“India is a unique country where the financial market is by the people, of the people, and for the people,” said Mr. Ashishkumar Chauhan, Managing Director & CEO of the National Stock Exchange. He added that India today has investors in over 19,000 pin codes, with people trusting its entrepreneurs and investing in India’s future through the financial markets.
Continuing the conversation about India’s position as a global investment destination, Dr. P. R. Jaishankar, Managing Director of India Infrastructure Finance Company Limited, stated that the transformation taking place in India makes it significantly attractive as a destination for global investors. He also mentioned that 25% of infrastructure projects in India are in the Public-Private Partnership (PPP) mode, making this the largest PPP exercise in the world.
“In the last 15 years, we have seen a 5% decline in the savings rate. However, India is doing remarkably well because, during the same period, we have seen equity and equity-related assets rise,” said Mr. Amit Chandra, Chairperson of Bain Capital India Office and Co-Founder of ATE Chandra Foundation. He highlighted that India’s growth story has been made possible by policy nudges and collaboration among various players in the ecosystem. He also posed a question to the audience: “How do we create the most vibrant private equity market?”
Mr. Rajiv Memani, President-Designate of CII, Chairman & CEO of EY India, and Chair of the EY Growth Markets Council, moderated the session. In his opening remarks, he stated, “The Indian economy is in good health—not only in terms of GDP growth but also resilience.” He also added that, while much of the infrastructure development in recent years has been supported through budgetary allocations by the Government, the transition will require greater involvement from the private sector moving forward.
11 December 2024
New Delhi