Indian equities no more vulnerable to foreign money: SEBI chief

Amid record-breaking run in the Indian stock markets, Securities and Exchange Board of India (SEBI) chairperson Madhabi Puri Buch on Friday said the Indian equities are no longer vulnerable to foreign investments as mutual funds and retail investors have become major players.

“Even when foreign money goes out, it may be because of Fed (Federal Reserve of the US) tightening etc...resilience comes because our investors are really coming in either directly or through the mutual fund and through other domestic institutions,” Buch at CII’s Global Economic Policy Forum.

She said the asset under management of mutual funds in India has surged to Rs 50 lakh crore from just around Rs 8 lakh crore 10 years back. “We now have over 4 crore of investors who are contributing to the stability of the market,” she added.

Buch further underlined that the market capitalisation of the companies listed on the BSE has surged to Rs 311 lakh crore from around Rs 74 lakh crore 10 years back.

SEBI chief’s comment comes in the backdrop of record breaking bull run in the Indian equities markets. Benchmark Sensex of the BSE hit a record high of 69,893.80 points on Friday, while the broader Nifty 50 of the NSE soared past 21,000 points mark for the first time.

The number of systematic investment plans (SIPs) accounts soared to an all-time high of 7.44 crore in November. Monthly SIP contribution crossed Rs 17,000 crore-mark for the first time in November, as per the Association of Mutual Funds in India (AMFI) data released on Friday.

“While there appears to have been some level of profit booking, the SIP numbers have continued to grow and have hit an all time high. This reflects the continued faith of retail investors in the equity markets and in the mutual fund industry,” said G. Pradeepkumar, CEO, Union Asset Management Company.

To cater to investors with a high-risk appetite, the market regulator is planning to introduce a new asset class between portfolio management services (PMS) and mutual funds. "We see room for an asset class between PMS and mutual fund,” SEBI chairperson told reporters.

She said the SEBI would come out with the new asset class after consultation with the industry and other stakeholders. “That's what we are discussing with the industry, what will this asset class look like, what should the benefits and risk mitigation for investors be,” she added.    
 
Buch said the market regulator is aiming at greater automation to ease compliance, supervision, standardisation of data.

On bond markets, she said the inclusion of Indian sovereign bonds in the global indices would draw the interests of global investors.

“This is hugely important for us as a country, not only because it will help the government raise resources, but once the Indian yield curve is established globally, on the back of that, the corporate bond market can also get a lot of traction,” she said.

“We are hoping that down the line, it will be a case of my name is bond, Indian bond,” she added alluding to the growing importance of the Indian bond in the global markets.