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Indian capital market still inspires confidence: SEBI

Money raised through rights issues has climbed up marginally,SEBI has said.

Written by Agencies | New Delhi |
January 25, 2009 12:26:25 pm

Not all is gloomy in the current economic environment,at least in the financial terrain,which indicates that the turnaround still holds promise and inspires confidence in the Indian capital markets,says the monthly bulletin by the market regulator.

While funds raised through public issues have fallen more than 94 per cent in the first eight months of the current financial year,money raised through rights issues has climbed up marginally,Securities and Exchange Board of India (SEBI) in its December bulletin said.

It stated that the 18 rights issues during April-November 2008-09 raised Rs 10,627 crore,slightly higher than in the year-ago period.

Funds raised by the corporates through private placement of debt issues have kept pace with that in the 2007-period.

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Funds raised in the eight-month period is Rs 86,604 crore,trailing last year’s by a mere 2 per cent.

The falling-behind trend,here,has been arrested since October. The last two months in the review period registered a rise of 52 per cent each in terms of amounts raised both on the BSE and NSE against last year.

While net resource mobilisation by mutual funds for the April-November period is negative at Rs 30,530 crore as against last year’s positive Rs 1,35,124 crore,the figure for November is a positive Rs 13,789 crore.

However,net investment by mutual funds,which stands at Rs 23,135 crore in April-November period,was more than halved in the last two months of the period as the funds liquidated Rs 28,621 crore,mainly in debt.

Even as foreign institutional investors (FIIs) liquidated Rs 35,730 crore in the current financial year till November,there was a net inflow of foreign funds of Rs 1,616 crore in November,the regulator said.

About investment,it said,there is a clear inclination towards debt instruments than equity,according to the figures reported in the SEBI’s bulletin.

In the review period,FIIs liquidated Rs 43,304 crore in equity,whereas invested Rs 7,574 crore in debt. And,mutual funds,in the period,invested Rs 15,610 crore in debt,double of its investment of Rs 7,526 crore in equities.

Besides,last Monday,Commerce Minister Kamal Nath said the foreign direct investment (FDI) of USD 18.7 billion in the first three quarters of the current fiscal year is double than last year.

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