Published on Nov 30, 2023
The significant transformation of the Capital Market in India is clearly evident from the changes that have occurred in the Stock market. The developments have facilitated greater choice for investors, who have become more discerning and demanding.
Currently, the most important factor shaping the world is globalization. The benefits of globalization have been well documented and are being increasingly recognized. Integration of domestic markets with international financial markets has been facilitated by tremendous advancement in information and communications technology. But, such an environment has also meant that a problem in one country can sometimes adversely impact one or more countries instantaneously, even if they are fundamentally strong.
There is a growing realization that the ability of countries to conduct business across national borders and the ability to cope with the possible downside risks would depend on the soundness of the Capital market. This has consequently meant the adoption of a strong and transparent, prudential, regulatory, supervisory, technological and institutional framework in the sector on par with international best practices is necessary. All this necessitates a transformation: a transformation in the mindset, a transformation in the business processes and finally, a transformation in knowledge management. This process is not a one shot affair; it needs to be appropriately phased in the least disruptive manner.
Objectives of a project tell us why project has been taken under study. It helps us to know more about the topic that is being undertaken and helps us to explore future prospects of that topic. Basically it tells what all have been studied while making the project.
• To learn about the Reforms in the Indian Capital Market.
• To analyze the respondents' view about the Capital Market and related concepts.
• To analyze the recent initiatives in Capital Market
• To analyze the history of Standard chartered bank and its business & strategy.
Research is a process through which we attempt to achieve systematically and with the support of data the answer to a question, the resolution of a problem, or a greater understanding of a phenomenon. This process, which is frequently called research methodology, has eight distinct characteristics:
Research originates with a question or problem.
Research requires a clear articulation of a goal.
Research follows a specific plan of procedure.
Research usually divides the principal problem into more manageable sub problems.
Research is guided by the specific research problem, question, or hypothesis.
Research accepts certain critical assumptions.
Research requires the collection and interpretation of data in attempting to resolve the problem that initiated the research.
Research is, by its nature, cyclical; or more exactly, helical.
• Primary Data: - The sources of Primary data were questionnaires and personal interviews.
• Secondary data: - the sources of secondary data were internet, books and newspaper articles.
Capital market reform enables the capital markets to embrace new ideas and techniques affecting the capital market. Capital market liberalization is one such capital market reform that is adopted by various countries to strengthen their economy. A capital market is a place that handles the buying and selling of the securities. This is the ideal place where both the governments and companies can raise their funds. The capital markets of all the countries have undergone a number of reforms in the history. Economic theories are made and implemented to reform the functionalities of the capital market. The prime objective behind all the policies and reforms was obviously to strengthen the capital market of a particular country as much as possible.
It has been always a big question to the economists whether to allow or not to allow the foreign investments in the country. Packaged with both advantages and disadvantages, the liberalization of the capital markets has always been controversial. In the 1980s and 1990s when the US Treasury and International Monetary Fund (IMF) tried to push world- wide capital-market liberalization, there had been enormous opposition. Economists were not in the support of free and unfettered markets. Now, when the capitalist countries, developing capitalist countries, underdeveloped countries and a large number of socialist countries have nodded their support to the capital market reform and capital market globalization, the global capital market has evolved in a new identity.
The concept of capital market is not restricted to the share and bond trading in the developed capitalist countries only but is equally influenced by the capital markets of developing and underdeveloped countries as well. Now the economic or financial change in one country can affect the capital market of other country in real time. Almost all the countries are now exposed to the inter-country trades and inter-country investments. The use of internet and electronic media has added some more feasibility to the practice. Exchange of information is fast and accurate with internet. Another advantage of this system is that it brings the entire world in a single place. The capital market is one of the industries that enjoy the maximum facility of the internet service.
Corporate Bonds and Debentures
These are medium- to long-term obligations issued by private-sector companies, either through a public issue or more often through private placement, for their medium-term working capital requirements or for project financing. The debentures are usually secured with a first charge on assets of the issuing corporation. On the average, the maturity period of debentures ranges from three to seven years. Bonds and debentures with a maturity beyond 18 months must be rated. Outstanding bonds and debentures in March 1998 totaled an estimated Rs 432 billion. Banks, DFIs, insurance companies, FIIs, mutual funds,NBFCs, and individuals are the main investors.
FIIs can purchase only debentures that are listed or that the issuer plans to list. A listing in the stock market can sometimes provide liquidity to bonds and debentures, although these tend to be illiquid in actual practice and even those that are listed are hardly traded in the secondary market. Bonds and debentures that are issued through private placement are often unlisted. Besides the traditional nonconvertible debentures, corporations also issue equity-linked debentures, which are very popular with all classes of investors, especially individuals. A partly convertible equity-linked debenture, as the name implies, is convertible only in part into equity shares, while a fully convertible equity-linked debenture is convertible in its entirety into equity shares. The conversion price and period are usually specified in the indenture. Conversion into equity is usually automatic, and call and put options are normally not provided. The coupon rate paid on the debentures depends on their convertibility. Fully convertible debentures carry the lowest coupon rate and nonconvertible debentures the highest coupon rate.
Marketing Research: Text and Cases,by Dr. RAJENDRA NARGUNDKAR.
Consultation with the supervisor
Interaction with respondents