SEBI Chairman Outlines Strategy for Capital Market Depth, Digitalization, and Investor Trust
SDG 8: Decent Work and Economic Growth | SDG 9: Industry, Innovation, and Infrastructure
Institutions: Ministry of Finance | Securities and Exchange Board of India (SEBI)
The address by the SEBI Chairman at the CII Southern Region meeting emphasized the region’s role as a major national growth engine, accounting for roughly 30-31% of India’s GDP and contributing significantly to capital markets (nearly ₹12 trillion in mutual fund AUM from Southern states). He highlighted the robustness of the Indian capital markets, noting that equity capital raised in H1 FY26 already surpassed ₹2.5 trillion, with the IPO pipeline ranking India first globally by number of IPOs and third by value. Outstanding corporate bonds reached nearly ₹55 trillion, close to 60% of bank credit.
SEBI’s Strategic Blueprint for Market Development
SEBI’s future direction is guided by the philosophy of ‘Optimum Regulation’ and focuses on developing market depth:
Primary Markets & Risk Capital:
Public Float Rules: SEBI is rationalizing Minimum Public Offer (MPO) thresholds to allow companies with substantial market value to meet public shareholding requirements through a gradual process.
Long-Term Funding: The Anchor Investor Framework in IPOs has been adjusted to specifically include long-term institutional investors, such as Life Insurance and Pension Funds.
Insider Transactions (RPTs): New scale-based thresholds are being introduced for Related-Party Transactions (RPTs) (insider deals) to balance the commercial needs of companies with investor protection.
Infrastructure & Debt Digitization:
Infrastructure Finance: The scope of Electronic Book Provider (EBP) platforms (digital trading venues) is being expanded to include infrastructure investment vehicles like REITs and InvITs.
Retail Bond Access: The minimum face value of corporate bonds has been lowered to enable everyday retail investors to access this market through Online Bond Platform Providers.
Risk Capital: Regulations for Alternative Investment Funds (AIFs)—which channel risk capital into startups—are being simplified based on a risk-based approach.
Digitalization and Ease of Doing Business:
SEBI aims to deliver a faster, efficient Foreign Portfolio Investor (FPI) experience by moving to end-to-end digital registration, with the goal of reducing registration time from months to just days.
A comprehensive review of several core regulations (e.g., LODR, Stock Brokers, Mutual Funds) is underway to eliminate redundancy and simplify rules.
Bridging the Investor Literacy Gap
A significant challenge remains in investor awareness: while 63% of households are aware of securities products, only 9.5% have invested. SEBI is committed to bridging this gap through multi-format and multi-lingual campaigns, particularly targeting regional languages like Telugu, Tamil, and Kannada. The authority is also simplifying the Offer Document Summary to reduce investor reliance on unverified tips.
Policy Relevance
SEBI’s commitment to “Optimum Regulation” through co-created frameworks is highly significant from a governance perspective. The concurrent focus on deepening the corporate bond market and streamlining investment routes for both domestic capital (AIFs) and Foreign Portfolio Investors (FPIs—by aiming to reduce registration time from months to days) ensures the capital market remains a transparent and efficient engine for achieving India’s Viksit Bharat economic goals.
Relevant Question for Policy Stakeholders: How will the rationalization of MPO thresholds and the simplification of the Offer Document Summary accelerate capital raising without inadvertently increasing risks for novice retail investors?
Follow the full news here: Address by Shri Tuhin Kanta Pandey, Chairman, SEBI