Scenario of Indian Capital Market

In India, after economic liberalization and globalization, many private players in the investment and banking industry came through. A large number of mutual funds have come up in the market since 1987. With the advent of computers the whole process of portfolio management has become quite easy. The computer can absorb large volumes of data, perform the computations accurately and quickly give out the results in any desired form.  Moreover simulation, artificial intelligence etc provides means of testing alternative solutions.

The economic reform made the Indian industry efficient, with market transparency, better infrastructure and customer services. The markets became dominated by large institutional investors with diversified portfolios.

Presently, phases II and III are currently advancing simultaneously with investment in various financial instruments becoming safer, with proper knowledge to each and every investor. Development of the quantitative techniques and professional portfolio management, backed by research is now adopted by mutual funds, investment consultants, individual investors and big brokers. The Securities Exchange Board of India (SEBI) is a regulatory body in INDIA. It ensures that the stock market is free from fraud.

Reforms in the securities market, particularly the establishment and empowerment of SEBI,  determined allocation of resources, screen-based nation-wide trading, dematerialisation and electronic transfer of securities, rolling settlement and ban on deferral products, sophisticated risk management and derivatives trading, have greatly improved the regulatory framework and efficiency of trading., settlement. Indian market is now comparable to many developed markets in terms of a numbers, qualitative parameters. Over the past several years the securities market has witnessed a sea change. The market has been more in terms of infrastructure, adoption of best international practices and introduction of competition.

With the maturity of the regulatory framework and increased market surveillance, the market has also’ become safer and investor is better protected. The extensive reforms introduced by SEBI over the last few years have enhanced the integrity, transparency and efficiency of the operations of the securities market. The introduction of electronic trading and order matching system in all the 23 stock exchanges, have led to reduction in transaction costs, speedier execution of trades and gains in liquidity.

Indian Capital Market Participants
Transaction cost in Capital Market

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