Finance minister Arun Jaitley will be meeting merchant bankers on Saturday in Mumbai. The meeting arranged at a short notice, comes as Indian markets have climbed over 6 per cent to trade at all time high since the BJP-led government was voted to power on May 16. The markets closed at a life-time high of 25,396 on Friday.
While the minister will also be chairing a meeting of the financial sector regulators including RBI and Sebi earlier in the day, his meeting with the bankers will give him first hand chance to explain the contours of the economic agenda of the new government.
Plans like making the rupee more convertible and making the Indian markets an attractive place in Asia to raise finance would need the support of the major investors who will be sitting across the table with him. Those expected to attend include Citibank, Temasek, Bank of America Merrill Lynch among foreign entities and domestic entities such as LIC, Kotak, Enam and the chiefs of stock exchanges NSE and BSE. Jaitley’s meeting with these people have not been announced by the Press Information Bureau.
While the government has been cheered by the rising trend of investment by domestic and foreign investors in both debt and equity, the minister would want a clearer picture from the merchant bankers about the way the Indian capital markets are expected to shape up in FY 15.
Meetings with merchant bankers have been high profile affairs. In August 2013 for instance, former finance minister P Chidambaram had met the FIIs and merchant bankers in the wake of the severe depreciation of rupee against the dollar.
For FY 15 the government has a crowded disinvestment agenda, offloading of stakes in public sector banks and yet keeping up the appetite of the market to buy into a large number of public issues that are expected to come from the private sector.
This includes plans to offer over Rs 40,000 crore of equity of public sector units. As per the interim budget, the government proposes to mobilise Rs 15,000 crore from the stake sale in Hindustan Zinc Limited and Balco and estimates disinvestment proceeds are pegged at Rs 36,925 crore.
The government calendar for FY 15 also includes an expected Rs 4,00,000 crore of debt to finance its fiscal deficit. All of these would need active participation and support of merchant bankers.