The Hindu Business Line : Call to simplify procedures for foreign investors

FURTHER regularisation of the tax regime and simplification of the bureaucratic procedures for investing in India were mooted as the more important requirements for attracting investors to India.

At the FICCI-SEBI annual conference on securities market, it was suggested that alternatives to the Mauritius route of investments for non-domestic participants to invest in the Indian economy should be explored to make India a better investment destination.

Mr Milind Barve, Managing Director, HDFC Asset Management Company, said that reforms in pension fund is essential to improve the depth of the market and the presence of long term pension money will help in this regard. "It is strange that our provident fund money is managed by the Government and the Government invests this in its own paper," he said.

Multiplicity of regulators governing the investments into India is also a serious concern while evaluating India as an investment destination.

Indian markets with a market cap of Rs 30,000 crore and a robust futures and option market with volume of over Rs 3,000 crore of turnover daily allow a efficient risk management toll for absolute return investors (the hedge funds) to be active in Indian markets, said Mr Jonathan Boyer, Managing Director, Boyer Allan Investment Management Ltd.

There are anomalies in the regulations and a lot of grey areas. "While advising clients on IPOs, for example, we are never clear as to what percentage is to be allocated to qualified institutional buyers. The ceilings seem to change from issue to issue," said Ms Dipti Neelakantan, Chief Operating Officer, J.M. Morgan Stanley.

Mr Ajit Dayal, Quantum Advisors, strongly recommended allowing the de-linking of the distribution and fund management of fund houses. He also mentioned that Quantum Advisors has applied with Securities and Exchange Board of India for starting up an asset management company.

The lack of development of the venture capital industry has been viewed as an indicator of the immaturity of the Indian market.

However, Mr Pulak Prasad, Managing Director, Warburg Pincus India Private Ltd, said that in view of the fact that Indian industry was liberalised only in the early-90's the rate of growth demonstrated by private equity participants has been as per expectation.

Chairing the discussion, Ms Naina Lal Kidwai, said that it is pertinent to note that even though FIIs continue to hog the largest chunk of IPOs, mutual fund investments are now significant in the book building process. "Gone are the days when LIC and UTI were sought after to make IPOs successful," she said.

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