Capital formation is a daunting challenge despite growth momentum

There are many instances of fake apps, cloned websites, and unregistered entities misleading investors, and Sebi is working with social platforms to take down misleading market content before damage spreads

The capital markets regulator will consult with stakeholders on ways to improve the tenor and maturity profile of derivative products, so that they better serve hedging and long-term investing, Sebi chairman Tuhin Kanta Pandey said on Thursday. Sebi’s approach in relation to equity derivatives, Pandey said, has been thoughtful and consultative. “We will consult with stakeholders on ways to improve the tenor and maturity profile of derivative products. We are looking to deepen the cash equities market, which is the true foundation of capital formation,” Sebi chief emphasised.

Volumes in the cash market have grown rapidly doubling in terms of daily traded volumes over a period of just three years. “However, much more needs to be done. We have often stated that equity derivatives play a crucial role in capital formation, but we must ensure quality and balance,” Pandey told the FICCI’s Annual Capital Markets Conference. The task of capital formation in the face of global headwinds in the era of geo-political and geo-economic fragmentation is a daunting challenge. We need to put our heads together to meet the challenge.

At SEBI, “it has been our conscious effort to simplify and rationalize our regulatory framework for ease of doing business without diluting our firm resolve for investor protection. Between March and June 2025, we have approved several ease-of-doing-business proposals for listed companies, AIFs, and FPIs,” he said.

Over the years, the Indian securities market has scaled rapidly. The market is looking good on several key parameters, such as: number of unique investors (13 crore), mutual fund investors (7 crore), healthy primary market (Rs 4.3 lakh crore raised in FY25), a strong fundraising pipeline (Rs 1.40 lakh crore can be raised going ahead), equity assets held by FPIs (Rs 72 lakh crore), and healthy ownership in listed entities by domestic investors. “We have growth momentum with us. It is time to convert it into a flywheel-robust regulatory framework, increased transparency and technology, trust in the system, greater investor participation, deep and liquid market, better price discovery, lower cost of capital, greater investment and innovation,” Sebi chief underlined.