Essay about Recent Development in Capital Market

Recent Expansion in Capital Market

Significance of Capital Marketplace in Economic Development.

Capital industry has a crucial significance to capital formation. For a rapid economic creation adequate capital formation is important. The significance of capital industry in financial development is explained beneath: -

1 . Mobilisation Of Cost savings And Velocity Of Capital FormationВ: -- In growing countries like India the importance of capitalВ market is obvious. In this marketplace, various types of securities helps you to mobilise personal savings from several sectors of population. The twin features of reasonable come back and fluidity in stock market are particular incentives to folks to invest in securities. This boosts the capital formation in the country. installment payments on your Raising Long lasting CapitalВ: -

The existence of an investment exchange allows companies to improve permanent capital. The traders cannot devote their money for a long lasting period but companies require funds forever. The stock exchange resolves this dash of interests by offering an opportunity to traders to buy or perhaps sell all their securities, although permanent capital with the firm remains not affected. 4. All set And Ongoing MarketВ: --

The stock market provides a central convenient place where buyers and sellers can easily order and sell investments. Easy marketability makes purchase in investments more liquid as compared to other assets. 11. Easy LiquidityВ: -

With the aid of secondary industry investors sell off their holdings and convert them into the liquid cash. В CommercialВ banks also let investors to withdraw all their deposits, as and when they are looking for funds. Growth of Capital Market in India.


|End of December |1975-76 |2004-05 | |i) Inventory Exchanges (No. ) |8 |23 | |ii) Their market value of Capital ( in Crore) |3, 273 |16, 98, 428 | |iii) Capital Problems (Rs. in Crore) |98 |60, 502 | |iv) Capital raised as % of major domestic | | | |saying(%) |0. 7 |7. 0

Source: -В Tata Services Ltd., statistiscal summarize of India 2005-06.

Following Independence capital market shows a remarkable improvement. The initial organised stock exchange was established in India at Bombay in 1887. When the Securities Agreements (Regulation) Take action 1956 was passed, simply 7 Share exchanges Viz. Mumbai, Ahmedabad, Kolkata, Chennai, Delhi, Hyderabad and Indore, received reputation. By end of 03 2004, the number of stock exchanges increased to 23.

1)В В PrimaryВ IВ New Issues Market: -

After liberalisation policy of 1991 and the annulation of capital issues control with impact from May 29, 1992, the primary market got an enormous, boost. This could be seen via following points: - a)В New Capital Problems by Exclusive SectorВ: -

The number of fresh capital concerns by personal sector was only 364 in 1990-91 and the volume raised by simply them wasВ `. 4, 312 crore. The amount of new capital issues flower to 1, 678 in 1994-95 and the amount raised by them wasВ `. 26, 418 crore. Since 1995 the main city market was sluggish and the resources elevated fell toВ `.. 10, 409 crores in 1996-97. In 2003-04, the total amount raised from new capital issues was onlyВ `. several, 210 crores. In 2004 it increased again toВ `. 33, 475 crore and 2005`. 35, 325 crore of resources were elevated on this market. The primary issues of personal debt securities sensed a low of aroundВ `. sixty six crore in 2005.

b)Public Sector Bonds: -

The time raised by issuing you possess by Public Sector companies rose fromВ `. 354 crores in 1985-86 to 7, 491 crore in...

Bibliography: [1] Stock market Official Directory, Vol. a couple of (9) (iii), Bombay Stock market, Bombay


[4] RBI; National Stock Exchange of India Limited