New Delhi, January 10: Securities and Exchange Board of India (SEBI) chairperson Madhabi Puri Buch on Friday said that the market regulator is exploring the use of AI for faster approval of IPOs and Mutual Funds (MFs) applications.
Key Points
1.
AI technology set to revolutionize IPO and mutual fund application processes
2.
Significant reduction in pending application timelines
3.
Rs 250 SIP proposed to enhance financial inclusion
"A large number of AI-driven projects are already on the way, within SEBI and one of the key utilisations of AI that we are deploying is to do faster processing of all applications so that we can turn this around even faster," said Buch during the inaugural session of the SEBI Samvad symposium.
Buch highlighted that as of November 2024, only two IPO applications were pending approval for over six months, which is a significant improvement from 8 in March 2022. She said the same goes for applications for mutual funds; as of November 2024, only one such fund application was pending that was six months old. This number was 69 in March 2022.
The introduction of AI will further reduce the timelines for IPOs and MFs approvals. Buch said the Indian IPO market is booming with a flood of applications being received every week.
"So, if we look at today, just in the last nine months, 3.3 lakh crores of equity have been raised. Just in the last three months, this has been achieved. So, in the last nine months, you can safely assume that for the remaining quarters, it will be roughly about 4.3 lakh crores at the end of the year."
Even though capital raising via equity has increased over the years, sometimes preference issues and rights issues go unnoticed in the primary market. "We have tried to increase the rights issues by doing a fast-track rights issue, which is followed by a preferential issue," Buch said.
Buch also stressed the need for a Rs 250 systematic investment plan (SIP) for mutual funds. She mentioned that just as capital formation is important for the economy to grow, inclusion is equally important. Hence, the proposed Rs 250 SIP is crucial to enhance financial inclusion. Buch asked State Bank of India chairperson Challa Sreenivasalu, who was also attending the event, to support and popularize the micro-SIP by engaging with its mutual fund business. The Rs 250 SIP is slated to be launched shortly, although the date has not been officially announced yet.
The SEBI chairperson also discussed the potential for REITs, InvITs, and municipal bonds, noting that they have significant growth potential over the next 10 years. Buch also highlighted that India's weight in the MSCI Index has been steadily rising. As a result, Indian equity markets now automatically receive a 20 percent proportionate share of global passive funds as part of the emerging market index inflows.
