Capital market experts and asset managers on Thursday urged the Modi 3.0 government to give priority to “low floating stock” counters in their future disinvestment decisions on listed public sector companies, including banks.

Such an approach would increase the supply of shares in the market and valuations would become reasonable, they conveyed to Finance Minister Nirmala Sitharaman and top officials of the Ministry at pre-Budget consultations meeting here.

Experts submitted that the government must, in the short term, take efforts to get to a “reasonable public float” in such “low float” public sector entities before moving eventually to the long-term goal of adhering to minimum public shareholding norms of the market regulator, sources said. 

Low floating stocks means those listed companies where the government holding is over 80 per cent and the public float is say less than 10 per cent or 15 per cent.

The mutual fund industry had also pitched for allowing mutual fund houses to launch pension products, noting that they can also meet the pension needs of Indians, sources said.

The issue of improving the financial literacy of the masses and the need to protect common citizens from the ponzi schemes was also discussed.

Nilesh Shah, MD, Kotak Mahindra AMC, said, “We requested FM to launch a Jan Nivesh campaign to create financial inclusion for crores of Indians who are stuck in ponzi schemes and speculations.”

A Jan Nivesh Yojana on the lines of Pradhan Mantri Jan Dhan Yojana is needed so that more Indians can participate in wealth creation, he said. There has to be both a push and pull in getting Indians to invest better and ensure that they don’t get caught in the ponzi schemes, Shah noted. 

Alternative asset industry 

The Indian Venture and Alternative Capital Association (IVCA), the apex industry body for alternative assets in India, came up with suggestions on fostering a more enabling regulatory environment to propel the growth of the alternative asset industry in India.

Srini Sriniwasan, Managing Director, Kotak Alternate Asset Managers Ltd, and Vice-Chairperson, IVCA, said, “We suggested measures to mainstream AIF investments and encourage and enable large domestic capital pools of insurance and pension funds to participate in the AIF industry to finance infrastructre, credit and start-ups.”

In addition, it has been suggested that AIFs must get tax parity and clarity like foreign portfolio investors (FPIs) so that one can minimise tax litigation and result in ease of doing business, he said. 

“We requested the government to prioritise asset management in India and have policies like Make in India to ‘Manage from India’ for global capital,” Sriniwasan added.

NBF sector 

Raman Agarwal, Director, Finance Industry Development Council, said that the NBFC sector urged the Finance Minister to set up a funding facility through SIDBI to meet the growing funding needs of small- and medium-sized NBFCs. This is now more required as banks have been reluctant to enhance their exposure to NBFCs due to several reasons. There is increased need for funds for NBFCs given the sharp increase in their advances in recent years, Agarwal added.

NBFC sector, which was also represented by George Alexander Muthoot, Managing Director, Muthoot Finance Ltd, urged the Finance Minister to bring relief on the tax deduction at source front. It was submitted that the TDS norms on NBFC customers were placing the sector at a disadvantage to the banks, which are not faced with such conditions.