The Securities and Exchange Board of India (SEBI) has said that retail investors’ participation in the stock markets has increased during the lockdown enforced to curb the corona virus epidemic. Sebi chairman Ajay Tyagi while addressing an event organized on the capital market of the industry body Ficci on Wednesday said that the number of demat accounts has increased significantly during this period. This is due to increased participation of new investors in the market. “The participation of retail investors in the stock markets has increased strongly over the last few months,” he said. Many analysts say this is because investors did not have much investment options during this period.
Tyagi said that it would be good for new investors to invest in risk-free government securities (G-Sec) first for easy entry into the capital markets. He said that to achieve this goal, government securities should be issued in demat form. The Sebi chief said that these new demat account holders would add other securities to their demat accounts after gaining experience through investment in government securities. He said that the market has recovered to a great extent from the March tremors. He said that despite the epidemic, the market raised more than Rs 2 lakh crore in the first quarter. Tyagi said that due to the suspension of the Insolvency and Bankruptcy Disability Code (IBC) provisions for six months, companies and lenders were unable to use the IBC framework for resolution.
Tyagi said that apart from this, the regulator has also simplified the process of raising funds by companies. Due to the epidemic, companies are facing many challenges, due to which these steps have been taken. These measures include rights issue, follow-on public issue (FPO), rules relating to eligible institutional planning and easy price structure for allocation of shares through preferential issue. Sebi relaxed the ease of raising funds through preferential allotment to companies struggling with the problem of stressed assets and exempted allottees from open offer commitments.
