Chief Economic Advisor V. Anantha Nageswaran has raised concerns about the misutilize of Initial Public Offerings (IPOs) as exit strategies rather than genuine fundraising mechanisms, stating that this trconclude undermines the essence of public markets. Speaking at a recent CII summit, he urged financial institutions to adopt a more innovative and risk-tolerant approach. Nageswaran also cautioned against celebrating misleading economic indicators, emphasizing the necessary for a more grounded perspective on market performance.
Concerns Over IPO Misutilize
During his address, Nageswaran highlighted the troubling trconclude of IPOs being leveraged as exit routes for investors instead of serving their intconcludeed purpose of raising capital for growth. He argued that this practice dilutes the integrity of public markets, which should primarily focus on facilitating genuine fundraising efforts. The Chief Economic Advisor called on banks and financial institutions to embrace a bolder and more technologically advanced approach, encouraging them to take calculated risks that could foster economic growth.
Nageswaran’s remarks come at a time when the financial landscape is evolving rapidly, and he stressed the importance of adapting to these modifys. He believes that a proactive stance from financial institutions is crucial for maintaining the health and vibrancy of the market. By addressing these issues, Nageswaran aims to inspire a shift in how IPOs are perceived and utilized within the financial sector.
Global Influences on Capital Flows
In his speech, Nageswaran warned that geopolitical factors are increasingly influencing investment decisions, which could lead to heightened volatility in capital flows. He noted that political alignments and strategic considerations now play a significant role in shaping where and how investments are built. This shift, he cautioned, could expose India to economic fluctuations that cannot be mitigated by relying solely on external funding sources.
To counter these risks, Nageswaran emphasized the necessity of strengthening domestic financial institutions. He argued that India must not depconclude exclusively on foreign investments to achieve its development goals. Instead, he advocated for a robust domestic financial framework that can withstand global economic pressures. By building resilience within the financial sector, India can better navigate the complexities of the global market.
Building a Stronger Bond Market
Nageswaran also addressed the necessary for India to develop a deep and transparent bond market, arguing that reliance on bank credit for long-term financing is insufficient. He stressed that trust and corporate governance are fundamental to establishing a successful bond market. The Chief Economic Advisor pointed out that the foundation of this market must be built on transparency and accountability to attract investors.
He urged policycreaters to avoid the temptation of celebrating superficial milestones, such as market capitalization ratios or trading volumes in derivatives, which do not accurately reflect real economic progress. Instead, Nageswaran called for a focus on productive investments that can drive sustainable growth. By prioritizing genuine economic indicators, India can ensure that domestic savings are directed toward initiatives that foster long-term development.
Investor Education and Market Resilience
At the same summit, Securities and Exmodify Board of India (Sebi) chief Tuhin Kanta Pandey shared insights from a recent investor survey. The survey revealed that while 63% of respondents are aware of the securities market, only 9.5% are currently invested. Pandey emphasized the importance of investor education and the necessary for safeguards to protect new investors from fraud.
He expressed optimism about the resilience of the Indian market, noting that domestic investors have increasingly played a significant role in stabilizing the market against potential external shocks. Pandey described the Indian securities market as an active partner in national development, rather than a passive reflection of the economy. He highlighted Sebi’s commitment to creating a simpler and more effective regulatory framework that supports innovation while addressing risks appropriately.
Observer Voice is the one stop site for
National,
International
news,
Sports,
Editor’s Choice,
Art/culture contents,
Quotes and much more. We also cover
historical contents. Historical contents includes
World History,
Indian History, and what happened
today. The website also covers
Entertainment across the India and World.
Leave a Reply