The Securities and Exchange Board of India (Sebi) in its annual report 2023-24 on August 9, 2024 mentioned its plans to revamp the current rights issue and the real estate investment trust (Reits) framework.
“Sebi would be reviewing the existing rights issue framework to rationalise the disclosure requirements and reduce the timeline for completion of the rights issue process... Sebi will bring certain policy changes to promote the ease of doing business for Reits and InvITs, debenture trustees and credit rating agencies. Further, data benchmarking services with a focus on Reits are proposed to be made operational,” Sebi said.
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Along with this, Sebi is also working on improving the settlement workflows to ensure that investors, including foreign portfolio investors (FPIs), have expedited access to funds and securities. As part of its efforts to promote financial inclusion, Sebi further plans to facilitate the launch of low-ticket systematic investment plans (SIPs) for investors.
Equity Returns And Volatility In 2023-24
In the 2023-24 period, India’s Nifty 50 had a return of 26.6 per cent with an annual volatility of 9.5 per cent. In terms of volatility, India beat every other market except Singapore.
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In other markets, the Nikkei 225 in Japan made the highest return of 44 per cent with an annual volatility of 15.9 per cent, while the Nasdaq Composite in the US gave a return of 34 per cent with an annual volatility of 15.2 per cent. Taiwan’s Taiwan Taiex gave a return of 27.9 per cent, with an annual volatility of 11.5 per cent, and Brazil’s IBOVESPA gave a return of 26.6 per cent.
Incidentally, the volatility in the Indian equity market, which generally remained lower than that of other global indices during Q1-Q3 2023-24, increased during the last quarter of 2023-24. The market capitalisation to GDP ratio for BSE rose to 131.7 per cent at the end of 2023-24 from 95.8 per cent in 2022-23. The turnover to GDP ratio in the cash segment was 73.9 per cent in 2023-24, and the turnover (premium) to GDP ratio in the equity derivatives segment increased to 165.6 per cent from 150.2 per cent last year, further indicating a buoyant market.
At the end of 2023-24, price-to-earnings (P-E) ratios (trailing) for benchmark indices – Nifty 50 and Sensex – rose to 22.9 and 25.2, from 20.4 and 22.4, respectively, recorded at end of 2022-23.
Another point mentioned in the report was that even the valuations were high after accounting for future growth. India MSCI, which covers around 85 per cent of the Indian equity universe was trading at 22.1 times forward P-E as against MSCI EM at 12.1 times at the end of March-24
