In the current scenario what is your view on the equity markets?

Markets even through the whole political turmoil and war-like situation have been reasonably buoyant. The mood of the economy and the industry has not been negative, and with the end of the Kargil issue the positive outlook will further improve the market confidence.

Looking at the primary markets and with only software IPOs hitting the market barring Times Bank, and the background of the secondary markets, do you see the IPO sector improving this year?

The IPO sector will be seen gradually coming up, separatefrom the IT sector [which is the flavour of the year]. IPOs from other sectors of the economy will be seen slowly coming into the market and in this scenario the investors are going to be choosy in terms of the quality of the issuer, the issue, the management and the rest of it. So, the market may not see the levels of oversubscription that it had once seen.

Compared to last year we are going to see a lot more activity in the IPO market. There are two reasons behind this: One, corporates raise money for projects and in the last year there were not many projects coming in. And this will happen when companies witness buoyancy and see an improvement in turnover and sales.

How can we further develop this market?

One, we need to make sure that equity or capital market based investment has liquidity. We have listing in the market but not necessarily liquidity which means that market makers have not played their role among others. There are various difficulties in having market makers [separate fromthe financing side being just a smaller part of it] but no market maker, if continuously expected to give two way quote, also requires a hedging mechanism.

From which sectors of the economy do you see IPOs coming?

I think it would be across-the-board from FMCG to pharmaceutical to information technology. When do you see the IPO sector buzzing with a lot of activity? I think for the IPO sector to really see good amount of activity it would still be six months. Again, we will not see the same numbers as three issues a day. The second way in which we can develop the IPO market is through making the whole process of IPOs more efficient. There has been talks of putting it on the screen or allow entire IPOs to be done in the book build manner. So, if we have the global style of book building where actually trading starts the next day, it will healthy for both issuers and investors.

As compared to last year what kind of scenario do you see in the secondary markets?

This year we have witnessedbetter volumes, seen a sustained interest and FIIs coming in through the war like situation. There is more maturity in the market and if the current trend line is anything to go by which includes the corporate performance, as at the end of it markets cannot work in isolation with the economy, I think it is definitely positive.

In which way can the secondary market be developed further?

With the demat in, it has made transacting business so much easier, simpler and transparent. In fact in India we have been more successful in demat then in any other country in the world and it is a very positive a trend.

What is the view on Internet trading in India?

I think we still have time to get into that because I think the right sort of security measures are not in place it will be a little difficult to get into it straight off. People will start planning about it. Even as Internet is the buzzword its penetration in our country is minuscule. As Internet spread, I will say that e-commerce willfirst come into a lot of other areas before it comes into stock trading. And it will be in simpler areas like books, music.

But, it will take time to get into other things like clothes, fruits, vegetables. But there are issues to be dealt into whether there is good amount of information given to the investor or not? The information flow to the Indian investor is constantly improving. But we still are far from it.

What are the prospects for the mutual fund industry?

I think it is slowly coming of age. Now the investors have a wide range of choices which is a very good sign. The recent tax breaks given to the fund industry has started money moving into mutual funds. A number of funds in recent times have been giving real good returns. Which in the long-term for the capital markets is healthy. And with almost all funds open-ended and good liquidity the investor is having a good time.

How would you see the industry developing?

One of the first things that the markets are witnessing inthe sector funds. Going further from here the next stage may see mutual funds for real estate.

What do you think on the certification of intermediaries?

It is important to have intermediaries certified and regularised as to who is authorise to sell investment products. And should apply across-the-broad in India including insurance.

Any regulatory changes that you will like to see from the Sebi?

I think we need to bring in derivatives and hedging instruments and need to make sure that they are not mis-sold. To begin with it may only be for the sophisticated investor slowly moving on to others. And then it will help provide liquidity in the market place at the end of it where people can easily get in and get out of shares bonds and any instrument. Sebi has been very proactive and has been using market expertise to make improved regulatory scenario.

Would you touch upon the M&A scene in India?

Actually, it is only A in India and we have not really had M. 99 per cent ofthe transactions that have taken place are not M and only been acquisitions or cash. The only sort of merger or payment by paper has been only within the same group and not see really parts of different groups merging which is what you see globally.

Now, that is not happening because there are mental blocks in minds. People need to get out of that mind-set as long as it is going to create better shareholder value it should be the bottomline.