Free Press Journal

Incentivise retail investors to enter capital markets: Parekh


Mumbai: Pressing the need to incentivise retail investors to enter domestic capital markets, industry leader Deepak Parekh today called for cutting down the dominance of foreign institutions whom he likened to big ‘party-hoppers’.

“We have to incentivise and encourage retail investors to enter our capital market because it cannot be dominated by foreign institutions,” HDFC Chairman Parekh said in a BFSI conference organised by SBI Cap Securities here today.

He said although FIIs (Foreign Institutional Investors) have invested USD 15.9 billion in equity and debt in India this year, they are big party-hoppers.

“If they don’t like your music and if they don’t like the drinks being served, they will find another party to hop on to really quickly,” he said.

According to Parekh, retail investors are still hesitant and it is unfortunate that they enter markets on the highs, instead of investing on the lows.

He said with the prediction of lower than normal monsoon this year, agricultural growth is going to be challenging.

“The bigger concern is the impact of inflation, and food prices in particular. Unless there is a willingness to change the supply chain management, food inflation is unlikely to come down,” Parekh said.

Pitching for the need to have more private warehousing and cold storage facilities, he called for dismantling of APMC (agricultural produce market committee) laws.

The Food Corporation of India needs a complete overhaul, as it remains a huge, unwieldy white elephant which is inefficient, with no accountability whatsoever, he said.

“For years, FCI has been run as a ‘Babu Neta’ fiefdom,” Parekh alleged.

He said the country needs to move towards market based pricing of energy requirements.

Parekh on the occasion also warned of increased activity and volatility in the currency and bond markets going ahead.