Bolstering markets

Sebi's mega reforms are a win-win for all—FPIs, DIIs as well as retail investors

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At a time when foreign institutional investors (FPIs) have been circumspect about the Indian stock market, the Securities and Exchange Board of India (Sebi) has given comfort to them as well as domestic investors to bolster the capital markets. The market regulator's strategy is interesting. With the realisation that the secondary market doesn't seem to be going anywhere whereas the mood in the initial public offering (IPO) segment is robust, it has taken a two-pronged approach.

One, as reports suggest, it is working on cutting down the IPO clearance tenure by 50%—from six to three months. One can expect as much as ₹1.8 lakh crore worth of issues to hit the market, and even more, if companies apply aggressively. Two, to ensure that these issues are well subscribed, Sebi has given more institutional heft and relief to issuers, by increasing the anchor investors' limit to 40% and bringing pension funds and insurers into play.