Primary market can’t be revived without retail participation

Ever since the new government has taken charge, there is optimism and hope in the air that the overall economic scenario of the country will improve. This, in turn, also means that the financial services sector may get a boost. Shachindra Nath, group chief executive officer, Religare Enterprises Ltd, which has a presence across various financial service segments such as brokerage, mutual fund, insurance and non-banking finance, talks about the sentiment in the market and about the course that the companies under the Religare umbrella will chart from here on. 

Edited excerpts: What is your reading of the market right now? The market had been stagnant for almost four years. Corporate debt was high and capital expenditure was not happening. But the market is buoyant now. I will not say that a lot of people have raised or are raising capital, but they are definitely preparing to do so. 

However, I do not see the retail market participating in the fund raising process. And unless that happens in a big way, there will not be much activity happening in the primary market, which essentially means companies coming out with IPOs (initial public offerings). Fundamentally, the economy has not changed much and challenges remain. 

Though liquidity has improved, it will take some time for it to translate into a buoyant market for the long term. Since liquidity is driven by sentiments or expectations of good times, serious long-term investors will wait. It will take a while for things to improve as the government has just come in. It is expected that many IPOs will hit the market soon.

Prashant Sharma 3rd Sem

Ever since the new government has taken charge, there is optimism and hope in the air that the overall economic scenario of the country will improve. This, in turn, also means that the financial services sector may get a boost. Shachindra Nath, group chief executive officer, Religare Enterprises Ltd, which has a presence across various financial service segments such as brokerage, mutual fund, insurance and non-banking finance, talks about the sentiment in the market and about the course that the companies under the Religare umbrella will chart from here on. Edited excerpts: What is your reading of the market right now? The market had been stagnant for almost four years. Corporate debt was high and capital expenditure was not happening. But the market is buoyant now. I will not say that a lot of people have raised or are raising capital, but they are definitely preparing to do so. However, I do not see the retail market participating in the fund raising process. And unless that happens in a big way, there will not be much activity happening in the primary market, which essentially means companies coming out with IPOs (initial public offerings). Fundamentally, the economy has not changed much and challenges remain. Though liquidity has improved, it will take some time for it to translate into a buoyant market for the long term. Since liquidity is driven by sentiments or expectations of good times, serious long-term investors will wait. It will take a while for things to improve as the government has just come in. It is expected that many IPOs will hit the market soon.

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