Confidence of foreign investors in India remains strong, says Sebi chief

At the Business Standard BFSI Insight Summit 2025, Sebi chief Tuhin Kanta Pandey said India's financial markets are growing stronger with transparency, reforms, and wider investor participation

Tuhin Kanta Pandey, chairman of the Securities and Exchange Board of India (Sebi), said that India’s financial markets are deepening with transparency and investor growth.

 

In a Fireside chat with Tamal Bandyopadhyay at the Business Standard BFSI Insight Summit 2025 in Mumbai, Pandey said, "Confidence of foreign players is very high as far as India is concerned. They are interested in long-term stories and short-term stories."

 

"So we have to just keep going together, identifying new opportunities, addressing our challenges. Trust is important."

 

Pandey added that India’s price-to-earnings (PE) ratio remains “roughly around the 10-year mean”.

 

Transparency, reform and regulatory consistency

 

Pandey highlighted Sebi’s ongoing efforts to enhance market transparency and investor confidence. “Our data is so transparent,” he said. He further said that the minimum public shareholding (MPS) norms have not been relaxed. “We have not diluted the minimum public shareholding norms, and it remains at 25 per cent,” he said.

 

 

The Sebi chief added that simplification of processes has been a key focus of policy consultations. “Simplification has been the objective of consultation papers,” he said, while stressing the regulator’s calibrated approach to reforms.

 

A conflict of interest committee formed by Sebi is expected to submit its report “within the next few days”, Pandey informed.

 

Mutual funds to drive market participation

 

Pandey said that the mutual fund industry will play a vital role in deepening India’s capital markets. “The mutual funds industry will grow rapidly. It is a good way to enter the market, and it encourages long-term investment,” he said. He also added that there is a need for greater flexibility for the expanding sector.

 

Tackling misinformation, cyber risks

 

Highlighting Sebi’s vigilance against misleading financial influencers, Pandey said the regulator has already taken down over 100,000 such accounts and is in the process of removing 5,000 more from social media platforms.

 

“Financial education is fine, but people who are crossing the line to mislead investors will not be tolerated,” he said. “With more improved tools, we should strike back those who are crossing the line. The ones who are misleading investors will be checked time and time again.” Pandey also mentioned that Sebi’s 32nd check will strengthen oversight and enable the public “to really be watchful” against cyber threats.

 

On market developments, Pandey said the long-awaited NSE IPO will see the light of day. He also admitted that “Sebi was late in adopting e-office", but added that the regulator now operates in a fully digital framework.

 

Financial markets at the core of India’s growth

 

In his keynote address, Pandey said India’s economic journey is closely tied to the health of its financial markets. “India's growth journey is deeply intertwined with the strength of its financial markets. A sound and efficient financial market comprising banking, capital markets, insurance and pensions forms the foundation on which enterprise, infrastructure and innovation stand.”

 

Participation in capital markets has widened significantly, from 40 million investors in FY19 to over 135 million today, with market capitalisation rising from 69 per cent of GDP in FY16 to about 129 per cent now, he said.

 

Pandey credited this expansion to tech-driven access, rising financial awareness and consistent regulatory reforms.

 

Balancing innovation, responsibility

 

Sebi’s focus going forward, Pandey said, will be on balancing innovation with accountability. He said that Sebi aims to promote responsible use of AI, strengthen cyber resilience and build quantum readiness among market participants.

 

“As we look to the future, our focus must remain to build a financial system that is strong yet agile, innovative yet responsible, and inclusive yet resilient through optimum regulation and effective collaboration,” he said.