India in 2012

Business and legal professionals share their forecasts for the coming year

Capital markets

Sandip Bhagat, partner, S&R Associates: The Indian capital markets experienced declining activity in 2011. The trends that impacted the Indian market include the volatility in the global financial markets, high inflation and interest rates, lower industrial output, a weakening rupee and perceptions that plans for economic liberalization had slowed. These factors may continue to influence capital markets activity in 2012.

Several regulatory changes could positively impact the equity and debt capital markets in 2012. These include the issuance by the Insurance Regulatory and Development Authority of a framework for public issues by life insurance companies, an increase in the permissible investment limits and permissible bond investments for foreign institutional investors and the introduction of a framework for credit default swaps in corporate bonds.

With respect to the disclosure requirements for equity offerings, the Securities and Exchange Board of India (SEBI) has revised the structure and contents of the abridged prospectus, as well as the bid-cum-application form. SEBI has also constituted a committee to recommend regulatory changes to simplify systems and procedures in the primary market.