Goodwill Investor Education Eagle’s Eyes – Stock Market Review.

The  potency of  Indian Bourses today: An analysis.

Listen to what the SEBI Chief says today about the Market:

We have been reiterating that the worst is behind us, for the Investors to notice. This has been amply demonstrated by the big rally with good volume in bourses for the past few days. The inherent strength of it lies in the fact that even after certain downturns the resilience of our markets has been well established  and has been phenomenal.

This has been primarily due to  Domestic Investors- Institutional and Individual- not depending on FPIs alone.. The retail participation has been phenomenally shooting up especially after the Covid pandemic disastrous impac

 Listen to what SEBI Chief Mr Tyagi says,

” Retail participation in the equity market has increased since the lockdown to contain the coronavirus pandemic began”, Securities and Exchange Board of India (SEBI) Chairman Ajay Tyagi said on Wednesday.

New demat accounts have shot up as several participants were first time investors, Tyagi said at FICCI event on capital markets.

“We have seen a huge surge in participation of retail investors in the equity market in the last few months,” he stated. To facilitate a smooth entry of these newcomers to the capital markets, Tyagi said it would be ideal that they begin their journey by first investing in risk-free government securities (G-Secs).

To achieve this, he suggested that G-Secs should be issued in demat form.

He, further, suggested that these new demat account holders, after gaining experience investing in G-Secs, could then gradually add other securities to their demat accounts.

Tyagi noted that markets have largely recovered from the shock of March. Many analysts have quoted the lack of other investment opportunities as one of the reasons for this phenomenon

Despite the pandemic, market raised over ₹2 lakh crore capital in the first quarter of 2020-21. Tyagi also mentioned about the challenges faced by corporates because of the unprecedented pandemic, adding that the COVID-19 situation has pushed many companies into stress and worsened it for already stressed companies and such firms are finding it difficult to raise funds from the market.

Further, due to the suspension of Insolvency and Bankruptcy Code (IBC) provisions for six months, both the companies and the lenders are unable to utilize the IBC framework for resolution.To help such stressed companies to raise capital through preferential allotment, Sebi has relaxed pricing methodology for such issues and exempted allottees from open offer obligations.

These relaxed norms can be used for restructuring of stressed companies without going through the IBC process, he said. Further, it has come out with a number of relaxations to facilitate fundraising by the corporates during these times.These relaxations relate to rights issue, follow-on offer, qualified institutional placements, creeping acquisition of shares by promoters and easier pricing framework for allotment of shares through preferential issue, he added.

According to him, many corporates have already used or are in the process of using these relaxations to raise funds to meet their requirements.

“We are passing through difficult, stressful and uncertain times. However, the challenges also bring along with them several opportunities. The revival of the stock market and an uptick in fund raising by the corporates is encouraging,” he said.

So investors are well advised to grab this opportunity and  make full use of this panorama to their advantage and gain.

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