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SEBI chief reassures NRIs that India Inc is safe

Securities and Exchange Board of India chairman D R Mehta says that steps are being taken to boost investor confidence in the Indian capital markets.

''Our norms today are comparable to those in most developed countries'', Mehta said, while speaking on 'Investment Potential and Climate in India in the Next Millennium' in Dubai on Sunday night.

Mehta used the occasion to brief non-resident Indian investors about the several steps being planned by SEBI to make Indian markets safer and more transparent.

He said 20 of the 22 stock exchanges were fully computerised and the remaining two would be computerised soon.

SEBI, he said, has taken measures to ensure that fly-by-night operators did not enter the market any more. He also spoke about the tight advertising code being enforced in respect of public issues.

Mehta also outlined plans to help companies raise funds through the book-building route.

He said about 125 scrips would soon be added to the list of 125 companies whose shares could be traded in by institutional investors only in the demateralised form.

By January 1999, there will be ten scrips in which even individual investors can trade only in the dematerialised form. ''This list will be enlarged gradually,'' he said.

Mehta also spoke about trade guarantee funds which ensured that settlements took place on time at the various stock exchanges.

He said the takeover code would be revised further on the basis of the recommendations of the P N Bhagwati committee, which was expected to submit its report in the coming weeks.

According to him, mutual funds were becoming more popular with individual investors. Last year, mutual funds raised about Rs 110 billion from the market against just Rs 50 billion raised by companies through initial public offers and rights issues, he said.

Mehta said the growing international confidence in India could be gauged from the fact that new foreign institutional investors were being registered regularly.

He said the success of the Resurgent India Bonds issued last month by State Bank of India showed that India remained an attractive bet for investors at a time of turbulence all around. ''The RIBs also taught a lesson to credit rating agencies,'' he remarked.

Indian Ambassador to the United Arab Emirates M P S Menon pointed out that NRIs in the UAE had contributed as much as $ 1.26 billion out of the total of $ 4.16 billion raised by State Bank of India through the RIBs.

He said NRIs in the UAE had sent home remittances of more than $ 1.68 billion in 1997. The figure for the first six months of this year was $ 1.05 billion, he said.

Both Mehta and Menon expressed confidence that India would be one of the great economic powers of the world in the new millennium.

''We need more confidence in ourselves and more positive thinking,'' Mehta added.

UNI