New York: Pitching for stock exchanges to become a major avenue for raising capital and channelise them into investments, BSE's CEO Ashishkumar Chauhan today said bourses can help companies garner $100-150 billion worth of funds a year, marking an over 10-fold increase from current levels.
He also said the exchanges need to shift their focus away from being a place to do “trading just for the sake of trading” to become a platform for capital formation.
“At BSE, in the last three-four years, the companies have been raising close to $10-12 billion by way of IPOs, offer for sale, debt instruments, etc.
“We have to raise the bar by expanding our facilities and our ability to take it close to $100-150 billion a year so that the funds are channelised into investments,” Chauhan said in an interview here.
The BSE chief, who was here to attend the India Investors Forum and other events in the backdrop of Prime Minister Narendra Modi's high-profile US visit, said the role of stock exchanges can be important in helping “India create $1-1.5 trillion investments in productive sectors and help create jobs”.
“We need to steadfastly focus on helping India raise capital and create wealth rather than just trading for the sake of trading. Basically, exchanges need to change their mindset.
“Today, a large portion of the exchanges' revenue comes from trading, that is from transaction charges, and we need to focus now more on capital raising. We have to participate in India's growth and become a catalyst and growth engine for our economic growth story. We need to shift the focus from trading to capital raising,” he said.
Chauhan also assured international investors that the Indian regulatory framework today is at the forefront of modern thinking about investor protection and investor rights.
“There is a special focus on how to provide minority investors their rights and how to bring transparency and fairness in the working of companies.
“In India, the capital markets regulator SEBI, the Ministry of Finance and the Corporate Affairs Ministry have strived in the last six months or so to ensure that investors who are used to protection and a regulatory regime in most developed markets, get similar things in India,” he said.
“Some of the newer regulations are such that they are even better than those in many advanced countries such as in the Americas and Europe. For example, the new Companies Act provides that related party transactions be voted by non-promoter shareholders only. That's a huge change from the earlier mindset and would allow non-promoter shareholders to have a bigger say in the working of a company,” he added.
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