MUMBAI, 15 September 2022: Special sessions were organized on Day-2 of FICCI’s 19th Annual Capital Markets Conference, CAPAM 2022 – Amrit Kaal: Roadmap for Capital Markets for India’s Century.
Addressing the Special Session, Tuhin Kanta Pandey, Secretary, DIPAM, Ministry of Finance, Govt of India, yesterday asserted that listing of public sector companies is an important objective of Government policy, not only from point of view of disinvestment receipts but also from the point of view of corporate governance and transparency that it brings, apart from broadening and deepening of capital markets. Drawing parallels with Atmanirbhar Bharat, he added that the success of the LIC IPO showed that India’s capital markets and investors have capacity to pull off a massive IPO of this stature.
Pandey said, “Fine balancing is required between raising of fiscal resources and the interest of minority shareholders. If we move too quick to garner resources from disinvestment through market sales, it will certainly create price overhang, which will not be in the interest of minority shareholders. What is important is a nuanced approach that is in the best interest of the stock market, shareholders as well as PSEs.” He further added that DIPAM is fully engaged and committed to safeguard interests of minority shareholders.
Highlighting another important initiative of DIPAM in the form of Bharat Bond ETF, Pandey alluded to the important role it has played in deepening of the bond market in India. Launched in December 2019, there have been three tranches with wide participation across categories. As envisaged, there have been several private bond ETFs that have been launched subsequently. As a result, cumulative AUM of bond ETF market has gone up to 63000 crores of which 78% is accounted to Bharat Bond ETF.
Emphasizing the role of capital formation in the present context of economic growth and in fulfilling the vision for India’s growth, Secretary, DIPAM emphasized the importance of brownfield investments and the potential opportunities it can create in the long term. He underscored another important pillar of the Government’s policy in the form of strategic disinvestment by way of privatisation and added that it will bring real benefits to the country in terms of growth and operational efficiency. He also quoted several examples of recent privatisation initiatives that took place in the recent past as well as ongoing transactions.
During an exclusive session with Chairman, National Financial Reporting Authority (NFRA), Dr Ajay Bhushan Pandey emphasized that NFRA is a specialized body set-up to improve the auditing and accounting process which will further increase the trust level of investors. “In the long run, accounting and auditing will strengthen and it will inspire trust. Once you have the trust of people, the investment in the capital markets will increase,” he added.
Dr Pandey said that it is imperative to have a strong foundation including pathbreaking reforms to increase participation of retail investors in the capital market. India is poised for the next level of growth, he added.
“India has adopted the IFRS (International Financial Reporting Standards) and adopting these international standards would inspire a lot of trust from the international investors along with domestic investors,” Dr Pandey added.
Addressing a session, Dr Saurabh Garg, CEO, Unique Identification Authority of India (UIDAI) said that nearly 100 per cent of Indian resident now have Aadhar and India can now have programs and schemes with universal coverage, riding on the digital infrastructure.
Dr Garg stated that we are now looking to expand the usage of Aadhar and explore how Aadhar can help in improving the ease of living for residents. “In last one year, we have enabled a couple of initiatives which would be of interest for the corporate sector and verification services is one of them,” he added.
“The offline verification is in nature of a direct relationship between a resident and the corporate which is performing that function. We have enabled voluntary usage of Aadhar, and it will empower the residents to use Aadhar to access a particular service which a corporate is offering them. We are increasing our outreach and awareness so that the corporate sector can use this service for e-KYC activities, without the intervention of UIDAI,” added Dr Garg.
He further mentioned that there are over 400 SEBI/RBI regulated entities, which have been notified for authentication services over the past few months. “A lot more entities would be able to utilize the strength of Aadhar for doing the e-KYC using the other platform. That’s the real opportunity going forward,” added Dr Garg.
It was also highlighted that face authentication has now been initiated in addition to different modes of authentication including fingerprint, Iris, OTP based through the mobile and even demographic authentication as one level. The UN Sustainable Development Goals, which were announced in 2015-16 have placed legal identity for all by 2030 as one of the targets. India is one of the few countries which has already achieved universalization of not only a legal identity for all but also a digital legal identity, makings it much more useful, Dr Garg emphasized.
Speaking on the success of Aadhar platform, Dr Garg said that there is a lot of interest from other countries in the Aadhar architecture. Many countries are coming forward to understand the Aadhar model. “It is important to realize that it’s not only technology that runs Aadhar. It is an entire ecosystem where we are able to reach 130 crore people and the technology work across the system in an offline mode in an online mode,” he stated.
Dr Garg further stated that UIDAI is actively working on digital identity standards which are global in nature. We are very well placed to work with other partners to look at the identity standards so that frugal and simple methods can be devised for non-technology savvy population.
