Future of Indian Capital Market
WHAT IS ON THE CARDS FOR CAPITAL MARKETS?
In the journey of life, we are always excited to know what is next in store for us. What does the future hold for us? What is our next destination? We are keen to find answers to those questions, and discover, on many occasions that, the future about every facet of life is more exciting than its past.
Let us now try to ask ourselves another question…. “What is the future of Indian capital markets?” An interesting question to analyze and look into, against the backdrop of numerous influencing factors like demographics, growing urbanization and technology.
The financial ecosystem of India is blooming and the Indian capital market has been performing well in recent times, competing aggressively with most developed of the global economies. Opening up of the economy has brought in increased Foreign Direct investment, putting India on the global map, and turning her into a force to be reckoned with.
The journey till now:
Indian Capital market has a rich history dating back to the 18th century.
Post liberalization in 1991, The Indian capital markets witnessed a steady growth, both in its width & market capitalization. This phase also witnessed two major milestones. The emergence of two stock exchanges – Over the counter Exchange of India (OTCEI) and the National Stock Exchange (NSE) which changed the way stock exchanges function.
Capital markets comprising of Equity, Debt, Derivatives, MFs, etc
have witnessed a series of improvements, innovation and developments that have led to its strengthening and vibrancy. Here are a few-
- Growth in Financial Intermediation:
The Indian capital market has grown due to the innovation mechanism of indirect financing. This has enhanced the efficacy of flow of funds through UTI, LIC and GIC.
- Growth in Underwriting of Securities:
The new issue market as a segment of capital markets can be activated through institutional arrangements for the underwriting of new securities. In recent years, there has been participation of institutions like LIC and banks like ICICI and IDBI.
- Growth in response to offer of public issues of shares and bonds.
- Growth of mutual funds: Mutual fund companies are investment trust companies and provide tax benefits. The investment of mutual funds in the secondary markets influences, and provides stability, to the share prices in the stock exchange.
The Road Ahead:
“The best way to predict your future is to create it” Goes the saying…How true!
The road ahead for the Capital Markets in India is very exciting, and challenging.
The emergence of Securities and Exchange Board of India (SEBI) as a strong capital market regulator shows India’s commitment to present itself as a formidable economic force by establishing best market practices for increased investor protection.
The capital markets are always seen as a reflection of economic health and growth of a country. They serve two main purposes…They bring together investors holding capital and companies seeking capital through equity and debt instruments.
With an improved economy after the turbulent phase of GST and demonetisation, the Indian Capital Market has entered a comprehensive growth phase and looks to be promising.
Tapping the power of technology:
Technology is pervading all facets of our lives and, has helped in creating many new chapters in the Indian capital markets too. It is interesting to see a few meaningful and productive trends of emerging technologies boosting growth of Capital markets, through digital transformation.
- Rise of FinTech and adoption of DLT:
Many financial services start-ups use DLT(Distributed ledger technology),bringing significant efficiency to current post trade processes.
- Emergence of new Data architectures:
Regulatory mandates and the need for data intensive analytics require strong data
management capabilities, thus helping the trading firms stay ahead of the
- Machine learning and Natural language processing
These are gaining prominence enabling the trading firms to reduce costs and increase efficiency.
- Adoption of Robotic Process Automation:
This technology can help drive efficiency, productivity and reliability of back end processes along with improvements in quality and accuracy.
- Increased use of Public Cloud based applications:
There is a tremendous pressure on capital market firms to reduce cost structures within a business environment and so the stake holders across the capital markets are exploring many new cloud based application models
- Increased focus on Data analytics: This enables the transformation of massive amount of data into useful and actionable information.
Thus the road ahead for capital markets is exciting, and so is the future of the career in capital markets. Does this field interest you? Does carving your niche in this domain whet your appetite?
Educesta Global Services, a renowned education management company in Bangalore feels proud to offer a competitive MBA in Capital Market. This MBA degree is awarded by the University of the West of Scotland.
The program imparts knowledge and insight into the vibrant and dynamic world of Capital markets, and its rich curriculum is designed to inculcate the competitive spirit and, confidence to climb the career ladder in the capital markets domain.
Read our next article: Why MBA in Capital Market