SEBI Chairman UK Sinha urged corporates to manage their own pension funds under the excluded category.

Addressing an Assocham event in Mumbai on Thursday, Sinha said, “Our market has been dominated by FIIs. Any talk of Government or SEBI changing the regulations or rules which can be perceived to be negative, creates massive negative feeling in the market. So, there is need for domestic institutional space to be increased.”

FIIs & pension money

“Going forward, somebody should start looking at creating a pension fund. If that happens, we can create a robust domestic institutional investors network. More than half of the money that FIIs are bring into the country is pension money. If our economy starts doing well after some time, the benefits of our economy will be shared by workers in other countries but not by workers here.”  

On the two-year window allowed for companies to list abroad before listing in India, Sinha said it is acceptable that there can be a need for a certain class of companies in the country which are of the new generation and tech-related that their valuation cannot be appreciated by domestic investors. That is the case in several countries. However, he cautioned that it should not be taken to the extreme.

“If we start believing that we cannot raise money in the Indian market and have to go outside, what will happen to the Indian market and what will happen to investors or savers in India? But this cannot be a permanent policy and will undergo a change.

Need for acquaintance

“But what do you get outside? Our market today has more than 1,700 FIIs registered here, and with sub-accounts they are three to four times more.”

FII flows into the country have been quite robust. Even in this calendar $10 billion has already come in, of which $5.5 billion is in equity. If marketed well and if the pricing is right, the same set of investors would be more than happy to come here and invest. Industry should try to acquaint themselves with the details of the schemes and utilise them, he added.

Sinha expressed concern over IPOs worth over ₹60,000 crore being withdrawn or allowed to lapse in the last three years.

SEBI, he said, is looking into the suggestions on increasing the quota for anchor investors in public offers, besides allowing corporates to raise money through convertible instruments.

On SEBI’s recently introduced corporate governance norms, he said, “It is better for companies to start implementing the norms in the right spirit. In any case, we are not going to change anything.

Directors & growth

“It is sad, if we cannot get 3,000 to 4,000 qualified independent directors, then let us not talk about 10 per cent growth. We do not have thousands of companies. We have just 5,000 listed companies, of which only 1,000 are actively traded.”

“Once you do that, India would be rated very high on these parameters and we would get more investors. Some of the largest hedge funds in the world met us and complimented SEBI for the work we have done in this direction. It is the question of creating the right environment,” the SEBI Chairman added.

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