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India’s capital market India’s capital market – investment options – investment options
India’s capital market – India’s capital market – investment optionsinvestment options
Indian Economy and Capital Market Indian Economy and Capital Market at a glanceat a glance
Second fastest growing economies after Second fastest growing economies after China with an average annual growth rate of China with an average annual growth rate of more than 8 per cent in the last three years more than 8 per cent in the last three years
India’s growth rate has surpassed some of India’s growth rate has surpassed some of the developed economiesthe developed economies
GDP at current market prices is over US GDP at current market prices is over US $778 billion $778 billion
Indian Economy and Capital Market Indian Economy and Capital Market at a glanceat a glance
Foreign investment can be made in India Foreign investment can be made in India with specific prior approval in sectors other with specific prior approval in sectors other than those prohibited than those prohibited
Foreign investment is now freely allowed in Foreign investment is now freely allowed in all sectors, including the services sector all sectors, including the services sector subject to specified sect oral ceilings except subject to specified sect oral ceilings except in a few strategically sensitive areasin a few strategically sensitive areas
Indian Economy and Capital Market Indian Economy and Capital Market at a glanceat a glance
General permission granted to the Indian General permission granted to the Indian companies for issuing rights/bonus shares companies for issuing rights/bonus shares to the existing nonresident shareholders to the existing nonresident shareholders subject to adherence to sect oral capsubject to adherence to sect oral cap
Indian companies may issue shares under Indian companies may issue shares under Employee Stock Option Scheme to its Employee Stock Option Scheme to its employees who are resident outside employees who are resident outside
Indian Economy and Capital Market Indian Economy and Capital Market at a glanceat a glance
An Indian company can raise foreign currency An Indian company can raise foreign currency resources overseas through ADRs or GDRsresources overseas through ADRs or GDRs
Foreign Institutional Investors are allowed to invest Foreign Institutional Investors are allowed to invest in India under the Foreign Institutional Investment in India under the Foreign Institutional Investment scheme scheme
Portfolio investment limits in individual companies Portfolio investment limits in individual companies can be raised by Board resolution keeping the can be raised by Board resolution keeping the overall sect oral cap in viewoverall sect oral cap in view
Indian Economy and Capital Market Indian Economy and Capital Market at a glanceat a glance
Investments can be made through foreign Investments can be made through foreign venture capital fundsventure capital funds
Private equity is allowed as an alternative Private equity is allowed as an alternative form of investmentform of investment
Qualified Institutional investors are allowed Qualified Institutional investors are allowed to invest in Indian Depository Receipts to invest in Indian Depository Receipts floated by foreign companies. FIIs and NRIs floated by foreign companies. FIIs and NRIs can also invest in IDRs after obtaining can also invest in IDRs after obtaining permission from RBI permission from RBI
Indian Economy and Capital Market Indian Economy and Capital Market at a glanceat a glance
FIIs can make investments in Corporate and FIIs can make investments in Corporate and Government Bond markets within the limits Government Bond markets within the limits
Household Investment in Shares and Household Investment in Shares and debentures as percentage of financial debentures as percentage of financial savings at 4.9 per centsavings at 4.9 per cent
Indian Economy and capital market Indian Economy and capital market at a glanceat a glance
Market capitalization of Rs.34,62,692 crore Market capitalization of Rs.34,62,692 crore or over US $ 770 billion as on November 17, or over US $ 770 billion as on November 17, 20062006
India is the world’s 12India is the world’s 12thth largest in market largest in market capitalization.capitalization.
Market cap-GDP ratio is almost 100 per centMarket cap-GDP ratio is almost 100 per cent
Indian Economy and Capital Market Indian Economy and Capital Market at a Glanceat a Glance
With Sensex crossing 13,000 mark – ahead With Sensex crossing 13,000 mark – ahead of most of the emerging economies with a of most of the emerging economies with a P/E ratio of 22.01P/E ratio of 22.01
NSE (India’s National Stock Exchange) is NSE (India’s National Stock Exchange) is the third largest in the world in the number the third largest in the world in the number of trades after NYSE and NASDAQof trades after NYSE and NASDAQ
Indian Economy and Capital Market Indian Economy and Capital Market at a Glanceat a Glance
India has 23 small and 2 big stock India has 23 small and 2 big stock exchanges exchanges
The 2 big stock exchanges (National Stock The 2 big stock exchanges (National Stock Exchange and Bombay Stock Exchange) Exchange and Bombay Stock Exchange) account for 90 per cent of tradeaccount for 90 per cent of trade
Over 7000 listed companies on the stock Over 7000 listed companies on the stock exchanges – largest in the worldexchanges – largest in the world
Indian Economy and Capital Market Indian Economy and Capital Market at a Glanceat a Glance
9040 brokers in cash segment and 1064 in 9040 brokers in cash segment and 1064 in derivative segment of the marketderivative segment of the market
122 investment bankers in the market122 investment bankers in the market 58 under writers to support primary issues58 under writers to support primary issues 34 foreign venture capital funds 34 foreign venture capital funds 120 Portfolio managers 120 Portfolio managers
Indian Economy and Capital Market Indian Economy and Capital Market at a Glanceat a Glance
11 custodian banks11 custodian banks 2 depositories with over 9 million beneficiary 2 depositories with over 9 million beneficiary
owner accountsowner accounts 120 Portfolio managers120 Portfolio managers Number of traders at 20 million Number of traders at 20 million Number of internet trading clients at 1.44 Number of internet trading clients at 1.44
millionmillion Internet trading at 12 per cent of total tradingInternet trading at 12 per cent of total trading
Indian Economy and Capital Market Indian Economy and Capital Market at a Glanceat a Glance
Rise in index during the last eighteen months Rise in index during the last eighteen months over 100 per centover 100 per cent
Year on year return during the last year at 74 Year on year return during the last year at 74 per cent per cent
Daily volatility of the market 0.76 per cent to Daily volatility of the market 0.76 per cent to 1.29 per cent 1.29 per cent
39 mutual funds with over 500 schemes for 39 mutual funds with over 500 schemes for investmentinvestment
Indian Economy and Capital Market Indian Economy and Capital Market at a Glanceat a Glance
Cumulative assets of mutual funds over Cumulative assets of mutual funds over US$68 billionUS$68 billion
India launches Capital Protection Fund and India launches Capital Protection Fund and Gold Exchange Traded FundsGold Exchange Traded Funds
About 1000 foreign institutional investors About 1000 foreign institutional investors
Indian Economy and Capital Market Indian Economy and Capital Market at a Glanceat a Glance
Investors by foreign institutional investors at Investors by foreign institutional investors at over $50 billionover $50 billion
At current prices, it is around 15 per cent of At current prices, it is around 15 per cent of the total market capitalizationthe total market capitalization
Only broad based entities established and Only broad based entities established and incorporated abroad are eligible to be incorporated abroad are eligible to be registered as Foreign Institutional investors registered as Foreign Institutional investors in India in India
Indian Economy and Capital Market Indian Economy and Capital Market at a Glanceat a Glance
FIIs can invest on behalf of their clients FIIs can invest on behalf of their clients through sub-accountsthrough sub-accounts
For normal FIIs, limit for investment in equity For normal FIIs, limit for investment in equity is at least 70 per cent while the rest could be is at least 70 per cent while the rest could be invested in debt up to a maximum limit of 30 invested in debt up to a maximum limit of 30 per centper cent
Indian Economy and Capital Market Indian Economy and Capital Market at a Glanceat a Glance
FIIs could also be dedicated debt funds who can FIIs could also be dedicated debt funds who can invest up to 100 per cent in debtinvest up to 100 per cent in debt
FIIs can issue overseas derivative instruments like FIIs can issue overseas derivative instruments like Participatory Notes (PNs) to the entities registered Participatory Notes (PNs) to the entities registered in the country of origin.in the country of origin.
There are 86 venture capital funds and 54 foreign There are 86 venture capital funds and 54 foreign venture capital investors venture capital investors
Most Foreign venture capital funds provide seed Most Foreign venture capital funds provide seed capital to firms with enormous growth potentialcapital to firms with enormous growth potential
Why invest in Indian capital Why invest in Indian capital markets?markets?
Business Week says that of 100 emerging Business Week says that of 100 emerging market firms which are rapidly globalising 21 market firms which are rapidly globalising 21 are Indian firmsare Indian firms
Economists project India to become the third Economists project India to become the third largest economy in the world by 2040largest economy in the world by 2040
Indian capital market regulator has acquired Indian capital market regulator has acquired international credibility in the least possible international credibility in the least possible timetime
Why invest in Indian capital Why invest in Indian capital markets?markets?
India has a disclosure based regime of India has a disclosure based regime of regulationregulation
Disclosure and Investor Protection Disclosure and Investor Protection guidelines availableguidelines available
India’s accounting standards are closer to India’s accounting standards are closer to international standards international standards
India has a well laid down legal frameworkIndia has a well laid down legal framework
Why invest in Indian capital Why invest in Indian capital markets?markets?
India has T+2 rolling settlement as opposed India has T+2 rolling settlement as opposed to T+3 in NYSE.to T+3 in NYSE.
In India the transactions are totally In India the transactions are totally electronic on a real time basis.electronic on a real time basis.
India has several protective safeguards for India has several protective safeguards for the retail investor such as grading system of the retail investor such as grading system of public offering, retail quota at 25 per cent public offering, retail quota at 25 per cent etc. etc.
Why invest in Indian capital Why invest in Indian capital markets?markets?
SEBI has made corporate governance SEBI has made corporate governance guidelines mandatory for listed companiesguidelines mandatory for listed companies
Mutual funds are permitted to invest Mutual funds are permitted to invest overseas up to $3 billionoverseas up to $3 billion
Margin trading is in vogue Margin trading is in vogue Corporatisation and demutualization of stock Corporatisation and demutualization of stock
exchanges on card - foreign participation in exchanges on card - foreign participation in bourses permitted.bourses permitted.
Why invest in Indian capital Why invest in Indian capital markets?markets?
As an integral part of risk management As an integral part of risk management trading and exposure limits, var margins and trading and exposure limits, var margins and mark to market margins are in voguemark to market margins are in vogue
Clearing houses and corporations with Clearing houses and corporations with novation in placenovation in place
Almost 100 per cent risk free electronic Almost 100 per cent risk free electronic settlement through depository system settlement through depository system
SEBI has a surveillance and enforcement SEBI has a surveillance and enforcement system in placesystem in place
Why invest in Indian capital Why invest in Indian capital markets?markets?
India to become a regional hub for bond India to become a regional hub for bond trading once a free financial zone is set uptrading once a free financial zone is set up
India to set up a world class National India to set up a world class National Institute for Securities Markets with 7 Institute for Securities Markets with 7 business schools under its fold business schools under its fold
