Saturday, July 2, 2011

Guest Lecture on Capital Markets by Mr. Sunit Joshi

SIMSREE was honoured to have Mr. Sunit Joshi (EVP, Head - Capital Markets, SBI Capital Markets Ltd) with us on campus for an interactive session on the Capital Markets. The agenda for the session was to give the batch an overview of the Indian Capital markets as well as clarifying students’ perceptions. The lecture was organised by the SIMSREE Finance Forum, and it was very good of Mr. Joshi to take time out from his busy schedule to spend a couple of hours with us.

The session was a very good learning experience for all the students present. Mr. Joshi started out by giving a brief introduction to the Capital Markets, both equity and debt. The floor was thrown open for students to ask him all the questions they had. Some of the topics discussed included reasons as to why the prices of most IPOS are low today. Mr. Joshi said that most IPOs were launched when the market was buoyant, but today it is dull. That is why price is below expected.

There was emphasis on the debt market, since most people have a clear idea about the equity market, but debt market is still a bit of an unknown entity. People had questions about why companies still prefer to raise money from banks as compared to taking loans via bonds. The reason given by Mr. Joshi was that the bond market is not very highly developed hence interest in participation is not very high. This is also the reason why FII in the bond market is less. Since the market is not fully developed, it is difficult to exit before maturity.

Mr. Joshi also discussed why the impact of FII entering or leaving the Indian capital markets was so high. He said that when FII money is exited from India, it flows to other countries, so it has a high impact. Whereas when domestic investors remove money from equities, and invest in some other financial instrument like mutual funds, it indirectly goes into equities via some other route. Hence the impact is not so high.

It was an extremely informative session, and gave the students a new perspective on the Indian Capital markets. We hope that Mr. Joshi would be able spend more time with us, and help the students in understanding more about the Capital Markets.


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