CHAPTER 2 ROLE OF PRIMARY SECURITIES MARKET IN INDIAN ECONOMY

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1 CHAPTER 2 ROLE OF PRIMARY SECURITIES MARKET IN INDIAN ECONOMY 2.1 Introduction The Indian capital market received special attention under the policy of liberalization. Reforms in the capital market, particularly the establishment of SEBI, abolition of Controller of Capital Issues (CCI), market determined allocation of resources, screen-based nation-wide trading and interest rate structure have greatly improved the regulatory framework and efficiency of trading and settlement in the Indian capital market. Finance is one of the important ingredients for economic development. It is needless to say that the financial markets (banks and the securities markets) encourage economic growth, as it depends on the rate of savings and investment. Securities markets channelize savings to investments and thereby decouple these two activities. As a result, savers and investors are not constrained by their individual abilities, but by the economy s ability to invest and save respectively, which inevitably enhances savings and investment in the economy (Bajpai, 2003) 1. The main objective of this chapter is to understand the status of the primary securities market in India before and after liberalization and the impact of this market on Indian economy. This chapter is divided into six sections. Section 2.2 deals with the functions of primary securities market. Section 2.3 highlights the status of primary securities market before liberalization. Section 2.4 discusses the theoretical perspective of capital market and economic development. Section 2.5 shows the role of Indian primary securities market in economic development and last section i.e. 2.6 concludes the chapter. 2.2 Functions of New Issue Market The main function of new issue market is to channel the transfer of funds from the surplus sectors to the deficit sectors, seeking to establish new projects or for 19 P a g e

2 expansion/ diversification/ modernization of existing ones. From the operational point of view functions of new issue market have been classified into three parts (i) origination, (ii) underwriting and (iii) distribution. The various agencies/ institutions engaged in these can be said to constitute the intermediaries of new issue market. The origination function refers to the investigation and processing of proposal for new capital issues. Investigation concerns with the careful study of technical, economic, financial and legal aspects of the issuing companies. This is to ensure that these warrants the backing of new issue market as the company is strongly based, has good market prospects, is well managed and is worthy of stock exchange quotation 2. Beside these, some advisory functions are performed by the various specialized agencies/ institutions for improving the quality of capital issues such as they advise the issuing company regarding the class and issue price of the securities to be issued, the timing and magnitude of issue, technique of selling, method of flotation etc. Origination does not guarantee the success of an issue. In order to ensure the success of an issue, the new issue market provides the specialist service known as underwriting. Underwriting service provides the assurance to the issuing company that the issue will be fully subscribed, if not up to the desire level then the un-subscribed portion of the issue will be subscribed by the underwriting institution 3. The sale of securities to the investors is referred to as distribution. This specialized job, in most of the cases, is performed by the brokers and dealers in securities, who maintain regular and direct contract with the investors. Therefore it can be said that a well developed new issue market should be pre-dominantly characterized by the existence of specialized financial institutions which perform separately each of the above three services. The efficiency of the new issue market to cope up with the growing requirements of the expanding corporate sectors would depend on the emergence of the specialized institutions/ agencies. 20 P a g e

3 So far as the nature of the services provided by the organized new issue market is concerned, it is the same in all developed countries. However, the degree of development and specialization of the new issue market organization, the type of financial institutions that are found to exist and the actual procedures followed varies from one country to other. Such variations are due to the deference in legal, social, economic and political environment of various countries. It is evident that the India s new issue market (NIM) suffers from specialized agencies in the pre liberalization period. 2.3 The Status of the Primary Market in the Pre-liberalization Period The Indian economy adopted the route of planned economic development after independence and realized that economic growth could only be achieved through large scale industrialization. The role of financial system was restricted to the channeling of resources from the savers to the users in line with socially productive pattern of resource allocation, in other words adoption of bankbased financing model as against market-based financing model 4. During the pre-liberalization period, the Indian capital market was also not well organized. The industrial securities market was narrow and semiorganized and there was lack of participation by intermediary financial institutions in long-term financing of the industry. As a result, the corporate sector had no easy access to raise capital and was unable to sustain the growth of new and innovative enterprises 5. The growth of investment activity and new issue market depends on the degree of investor s protection. During this period, the primary capital market was highly regulated under the provisions of the Controller of Capital Issues Act, This Act was passed in April 1947, with a view to facilitating the post war industrial expansion and provides protection to the investors. Industrial securities, as form of savings, were not popular in India before 1951, because of the inability of the securities market and the corporate laws to provide adequate protection to the holders of industrial securities. 21 P a g e

4 Controller of Capital Issues (CCI) became the potent instrument for regulating the investment in accordance with the objectives of planning. Despite the commencement of economic planning in , the new issue market could not make any remarkable growth until In the post-independence period, new issue market suffered from structural gaps. There was particularly no specialist institutional arrangement for the origination of issues of capital. Another serious drawback of the system was the absence of inbuilt provisions for distributing the securities to the investing public. Establishment of specialist financial institutions during the post independence period encouraged the growth of the new issue market in India. As such establishment of Industrial Finance Corporation of India (IFCI) in 1948, enactment of State Finance Corporation (SFC) Act in 1951, setting up of National Industrial Development Corporation (NIDC) in October 1954 and establishment of Industrial Credit and Investment Corporation of India (ICICI) in 1955 accelerate the growth of the new issue market in India. One of the major accomplishments of this institution lies not in engaging itself in underwriting and merchant banking and other important functions of development bank, it also engages itself in creating some sort of an orbit of an underwriting organization in the country, drawing the other financial institutions like, IFCI, SFC, IDBI, UTI etc. and encouraging such institutions to undertake underwriting operation at their own initiative. Another major development in the new issue market of India during the pre-reform period was the nationalization of life insurance business in 1956, setting up of Industrial Development Bank of India (IDBI) and Unit Trust of India (UTI) in Merchant banking activity was formally initiated into Indian capital market when the National and Grindlays Bank (NGB) obtained license from RBI in Consequent to the recommendations of the Banking Commission in 1972, the State Bank on India (SBI) started the merchant banking division in The real thrust in the new issue market in India was provided by the enactment of the Foreign Exchange Regulation Act (FERA) in 1973 and 22 P a g e

5 subsequent directives from the government to dilute the holdings of the foreign companies at attractive prices 6. As a result, foreign companies, public issues gave investors an instant appreciation and gave a lot of scope to the merchant banker to do the business of issue management. The role of new issues in financing the private corporate sector during the 1960s and early 1970s were declining in importance and the underwriting becoming almost universal and the institutions like the LIC and the UTI were becoming major players 7. The structure of corporate finance has undergone a sea change after the 1960 due to shift in the industrial policy 8, amendments to the Company s Act, liberalization of the controls on capital issued, the abolition of the managing agency system and nationalization of commercial banks. The volume of initial issues was smaller than the further issues up to 1983, afterwards the trend was reversed. The capital raised by debentures increased much faster than any other security after 1980 mainly due to change in government policies and various incentives 9. Yet another organizational weakness of the primary market in India in the mid-eighties was the obstacle in the floating of small issue. The difficulty of small issues was partly the result of institutional obstacles and partly due to the operational obstacles inherent in such issues themselves in the form of prohibitively high cost of capital. An urgent requirement of the market was the introduction of a method of flotation to raise capital. Table 2.1 shows the new issue activity in India during Table 2.1: New Capital Issues by Non-government Public Ltd. Companies Period Equity Debenture Preference Total (Rs. Annual in crore) Average to Source: SEBI & RBI 23 P a g e

6 The annual average of capital raised by non-government public limited companies increased from Rs 28 crore during the period 1950 to Rs crore during the period The capital formation by the non-government public limited companies in the pre-reform period was very low as compared to post reform period. During to , Public Sector Undertakings (PSUs) only raised fund through issue of bonds. These companies started raising capital through equity after liberalization. Indian capital market played a major role in the mobilization of savings in the 1950 s. But their importance diminished considerably during the period from 1960 to The major reasons behind the insignificant role in the financing of the industrial sector were: first, commercial banks and development finance institutions were able to provide priority sector funds at a below market cost and second, equity was attractive to neither investors nor issuers 10. Other reasons were unfavorable development such as the Chinese war (1962), devaluation in value of rupee (1966), the split in the congress party and subsequent policies of the government, especially the restrictions on payment of dividends. The market started becoming active again only after a large number of companies started diluting equity in favor of Indian investors. During the sixth plan period, the capital market emerged as one of the major sources of funds for the private corporate sectors. The capital market which used to raise an average, less than Rs. 100 crore per annum during 1970s entered a rapid expansionary phase in the 1980s. The capital issued by the private corporate sector increased from Rs. 414 crore in 1981 to Rs. 1,889 crore in In 1985, capital raised by the private corporate sector represented 5.3 per cent of domestic savings compared to 1.7 per cent in The expansion has been helped by the attractive package of incentives to investors in non-convertible debentures (NCDs) introduced in by investment institutions 11. Several committees were set up between 1980 and 1990 to review the various aspects of the capital market. Rangarajan Committee (1986) recommended that the corporate sector should try to be self 24 P a g e

7 reliant as far as possible by stepping up their own savings and by raising funds from the capital market and the Narasimham Committee on Financial System (1991), recommended several measures for speedy liberalization of the capital market Capital Market and Economic Development Capital, labour and investment are the main ingredients of traditional growth model. The importance of capital /finance in economic growth was first recognized by Schumpeter 13. Capital markets played some vital roles such as channelizing capital or long term resources to firms for productive purposes, modernization and development of financial system, allocation of savings for productive uses and also act as link-pin between deficit and surplus sector of economy for economic expansion and development of any country. The savers have money, not unlimited though, but they are not confident of a better return by investing their savings in their own ventures. They would rather prefer to entrust their savings to some entrepreneurs who would provide safety to their investment and at the same time provide an above the average return on their savings. Capital market provides a path through which it is possible. As a result capital market has been evolving as an institution that contributes to the development of the economy. There have been number of studies, which have established the relationship between capital markets and economic developments. An important study of Levine and Zervos 14 (1996) showed the empirical association between stock market development and long-run economic growth, using regression analysis of forty-one countries from 1976 to Result shows a positive significant relationship between stock market development and economic growth. Capital market is the driver of any economy to growth and development because it is essential for the long-term growth capital formation. It is crucial in the mobilization of savings and channeling of such savings to profitable self-liquidating investment. Mishra 15 (2010) examined the impact of capital market efficiency on economic growth in India using the time series data on market capitalization, total market turnover and stock price index 25 P a g e

8 from the period of first quarter of 1991 to the first quarter of 2010 with the help of multiple regression technique. The result shows that the capital market in India has the potential of contributing to the economic growth of the country. A satisfactory pace of economic growth in any economy is contingent upon availability of adequate fund. A well developed and efficient securities market, act as a supplier of funding for economic activity at macro level and plays the specific role in the economy 16. By mobilizing savings for productive investment and facilitating capital inflows, a securities market stimulates investment in both physical and human resources. There is increasing recognition among policy makers of less developed countries (LCDs) about the beneficial role of stock market in mobilizing and allocation of resource in support of growth and development. Specially, it is increasingly recognized that, given the competition for foreign sources of funding and the limited availability of domestic finance in LCDs relative to their development needs, equity market could play an important role in providing capital to the productive sectors, as well as facilitating the process of privatization. But efficient functioning of the market is an essential condition to ensure the above benefits to the economy 17. The supply of the capital is dependent on the rate of the savings in an economy. Savings emanate from three sources (i) Household sector, (ii) private sector and (iii) public sector. The financial intermediaries are mainly engaged in mobilizing personal savings Role of Primary Securities Market in Economic Development Organizationally primary securities market is different from the secondary securities market, but they are the integral part of a single market and both these markets act and re-act upon each other. It is the effect of such interdependence; inter-connection and inter-action that price movement on the secondary securities market and volume of activity on the primary securities market are directly and closely related. Issue of new securities tends to increase when secondary securities market is in boom stage and tends to decline when it 26 P a g e

9 is in bearing stage. Secondary securities markets are usually the first to realize the impact of a change in economic climate, but the effect is quickly transmitted to the primary securities market. Apart from the extreme sensitivity of secondary market to change in the economic climate, the quantitative predominance of the old securities in the market usually fix the tone of the acceptability of new issue of securities and also manage the price. Primary securities market as an integral part of the capital market accelerates the pace of economic development. The most significant way through which the primary securities market accelerates the rate of economic development is its role in mobilizing savings for investment in productive assets, with a view to enhancing a country's long-term growth prospects, and thus acts as a major catalyst in transforming the economy into a more efficient, innovative and competitive market place. Primary securities market not only helps in mobilization of investable fund, its operations also stimulate generation of savings by enhancing the propensity to save. A well-functioning primary market tends to improve information quality through the adoption of stronger corporate governance principles. It also supports periods of technological progress and economic development. 18 Primary markets are a potentially vital source of capital for firms in emerging nations. On the aggregate level, in both industrialized and emerging countries, there has been rapid growth in the issuance of both corporate debt and equity in the 1990s. As a percentage of GDP, many emerging equity markets exceed the level of the major developed markets 19. Globally firms raised $25.3 trillion of new capital during the period from 1990 to International securities issuance accounted for $4.9 trillion of this new capital. International debt issues much more common than the international equity issues. Firms are drawn to liquid and well regulated markets when they issue new securities. The U.S and U.K are by far the most preferred locations for cross border equity issues and are the only net exporter of the new equity capital P a g e

10 The role of primary securities market for the development of economy includes: (i) Primary securities market provides proper way to the corporate sector to borrow capital for to satisfy their long term investment needs, (ii) It provides opportunities for the marketing of securities in order to raise capital and also provides opportunities to allocate the countries financial resources among seekers of capital for productive uses. (iii) Through its mechanism primary securities market generating saving by enhancing the propensity to save, helps in capital formation and also through proper allocation it ensures effective and optimal distribution of investable fund for economic growth. (iv) Primary securities market helps in privatization programme of the government Scenario of Primary Securities Market in India Primary market is the centre point of the capital market which brings together the two principal segments of the market, that of investors and the seekers of the capital. Regular growth of the economy of any country is possible only through a robust and vibrant primary market. The size of the primary market in India remains much smaller than many advanced economies such as Hong Kong, Australia, the UK, the US and Singapore, as also emerging market economies such as Thailand, Malaysia, Brazil and the Philippines. The relationship between primary securities market, Index of Industrial Production (IIP), Gross Capital Formation (GCF) and also the activity of the secondary market (SENSEX) is shown in chart 2.1 below: 28 P a g e

11 Index value Chart: 2.1 Relationship between Primary Securities Market and IIP, GCF Index value Source: Compiled by researcher & SENSEX NCI_INDEX IIP_INDEX GCF_INDEX SENSEX_INDEX The main role of new issue market is to help in efficient and adequate mobilization of savings and their channelization in the productive investment and thereby facilitating in capital formation 21. It is observed from the chart 2.1 that resource mobilization from primary securities market in India closely related with the capital formation, performance of the secondary market and also with the industrialization in economy. Before 1992, Indian firms were required to obtain approval of CCI for raising capital. Only existing companies with substantial reserves were allowed to issue shares at premium whereas new companies were allowed to issue shares at par value only. Abolition of CCI Act in May 1992 allowed firms to price their issues freely. This resulted in a sharp increase of capital mobilized through equity related instruments 22. The emerging significance of the securities markets is expanding rapidly in the form of quantum of funds raised and number of investors in the primary market and the function of primary market is to facilitate the transfer of resources from savers market i.e., channelizing of investible funds, can be divided, from the operational standpoint, into a triple-service function; organization, underwriting and Year NCI_INDEX IIP_INDEX GCF_INDEX SENSEX_INDEX 29 P a g e

12 Rs. Crore Number of Issues distribution 23. The capital mobilized through IPOs increased sharply from Rs crore in to Rs. 13,443 crore in However, the trend declined drastically in the subsequent years. During , the market regulator, the Securities and Exchange Board of India (SEBI), introduced more regulations on IPO pricing and enforced other restrictions on promoters, such as the lock-in period for their holdings. Looking at SEBI's primary market status report for the year , it can be said that it followed its natural path. The conditions in the secondary market left its clear imprints on the primary market. The conditions in the secondary market had its impact on the pricing of issues. Of the 82 equity issues in the year , 52 issues were priced at a premium. Again the poor performance of the stock market, especially the BSE Sensex, has led to `sluggishness' in the primary market during the year The number of issues and amount mobilized from the primary securities market, during our study period is shown in chart 2.2 below: Chart 2.2 Capital Raise from Primary Securities Market (Post Liberalization-era) Number & Amount of Resource Mobilized Year Amount Source: Compiled by researcher 30 P a g e

13 It has been found from the above chart 2.2 that performance of primary securities market in India declined after , in terms of number of issues and amount mobilized. From onwards resource mobilization from this increases, except in the year due to global financial crisis. But the number of companies tapping this market declined from the early stage of liberalization. On the other hand, during the period ending in March 2001, only 54 issues from a total of 138 issues were brought at a premium. Though the number of issues increased, the average size of the issue dropped from Rs. 43 crore in the year to meager of Rs. 9 crore in the period ending in March The sector constituted 59 per cent of total number of issues while the share in value was only 13 per cent 25. Despite the sustained Bull Run in the secondary market and the feel-good factor sweeping the country and primary capital market continues to remain near-comatose. Contrary to the general belief of a revival, the reality is that only 15 public issues hit the market in 2003 to raise a meager Rs 2,194 crore. It is true that due to a series of scams, retail investors have indeed gone into a shell and their risk appetite has diminished. As of now, they would look at investing only in established companies, and only if these offer a reasonable price. This explains the domination of the primary market in The embarrassment caused to the government by the allotment mess in the six public sector disinvestment offers of March 2004 have triggered off the overdue process of modernizing India s primary market. The secondary market has grown aggressively after large-scale automation in the mid-1990s, but the primary market lags far behind. This is partly because it never quite recovered from the excesses of and the few good Initial Public Offerings (IPOs) that enthused investors did not warrant a change in systems and processes. The six mega PSU offerings revived investors interest and the enthusiasm of foreign investors not only ensured their success but also opened the doors to large private sector IPOs such as Biocon and TCS 27. Changing political environment in the country also 31 P a g e

14 affected the activity in the primary market in the year A change in government seems to have compelled prospective issuers to take a 'wait-nwatch' approach before proceeding with their offers 28. It is evident from the above discussion that primary market cannot thrive if there is a lack of liquidity in the secondary market 29, in the present condition. Out of about 9,500 companies listed on the 23 stock exchanges, there is practically no trading in about 4,000 companies listed only in the regional stock exchanges other than National Stock Exchange (NSE) and Bombay Stock Exchange (BSE). Indian primary securities market played an important role in the privatization of government enterprises in the post liberalization era. Tables 2.2 and Tables 2.3 show the name of the government companies, nationalized banks and financial institution which raised capital from the primary securities market during the last 22 years. Table 2.2 Fund Mobilized by Public Sector Units during Sl. Name of Companies Date of Type of Amount No. Issue Issue Rs. Cr. 1 Bharat Earth Movers ltd. 27/06/2007 FPO Hindustan Organic Chemicals ltd. 10/11/1994 FPO Indian Petrochemicals corp.ltd. 16/11/1992 FPO Madras Fertilizers ltd. 12/05/1997 IPO Madras Refineries ltd. 23/03/1994 FPO National Thermal Power Corp.ltd. 07/10/2004 IPO NHPC ltd. 07/08/2009 IPO Oil India ltd. 07/09/2009 IPO Power Finance Corp.ltd. 31/01/2007 IPO Power Finance Corp.ltd. 10/05/2011 FPO Power Grid corp. of India ltd. 10/09/2007 IPO Power Grid Corp. of India ltd. 09/11/2010 FPO Power Trading Corp. of India ltd. 01/03/2004 IPO Rural Electrification Corp.ltd. 19/02/2008 IPO P a g e

15 15 Rural Electrification Corp.ltd. 19/02/2010 FPO Shipping Corp. of India ltd. 30/11/2010 FPO Tamilnadu Telecommunications 09/05/1991 IPO 5.00 ltd. Source: Bombay Stock Exchange Table 2.3 Fund Mobilized by Public Sector Banks and Financial Institutions during Sl. Name of banks/ financial Date of Type of Amount No. Institutions Issue Issue Rs. Cr. 1 Allahabad Bank 23/10/2002 IPO Allahabad Bank 06/04/2005 FPO Andhra Bank 14/02/2001 IPO Andhra Bank 16/01/2006 FPO Bank of Baroda 05/12/1996 IPO Bank of Baroda 16/01/2006 FPO Bank of India 21/02/1997 IPO Bank of Maharashtra 25/02/2004 IPO Canara Bank 18/11/2002 IPO Central Bank of India 24/07/2007 IPO Corporation Bank 03/10/1997 IPO Dena Bank 28/10/1996 IPO Dena Bank 24/01/2005 FPO GIC housing finance ltd. 19/12/1994 IPO IDBI Bank ltd. 09/02/1999 IPO IND Bank housing ltd. 07/10/1991 IPO IND Bank Merchant Banking 18/03/1994 IPO Services ltd. 18 Indian Bank 05/02/2007 IPO Indian Overseas Bank 25/09/2000 IPO P a g e

16 20 Indian Overseas Bank 05/09/2003 FPO LIC housing finance ltd. 15/09/1994 IPO Oriental Bank of commerce 05/10/1994 IPO Oriental Bank of commerce 25/04/2005 FPO Punjab & Sind Bank 13/12/2010 IPO Punjab National Bank 21/03/2002 IPO Punjab National Bank 07/03/2005 FPO SBI Home Finance ltd. 15/02/1993 IPO State bank of Bikaner & Jaipur 20/11/1997 FPO State bank of Travancore 08/12/1997 FPO Syndicate Bank 25/10/1999 IPO Syndicate Bank 07/07/2005 FPO Uco Bank 03/09/2003 IPO Union Bank of India 20/08/2002 IPO Union Bank of India 15/02/2006 FPO United Bank of India 23/02/2010 IPO Vijay Bank 27/11/2000 IPO Vijay Bank 09/10/2003 FPO Industrial credit & Investment 13/02/1991 FPO Corp. of India ltd. 39 Industrial Development Bank of 05/07/1995 FPO India 40 Industrial Finance Corp. of India 07/12/1993 IPO ltd. 41 Shipping Credit & Investment Co. 04/02/1991 IPO Of India ltd. 42 Tourism Finance Corp. of India ltd. 26/09/1994 IPO Source: Bombay Stock Exchange 34 P a g e

17 2.6 Conclusion In sum, the study leads to the conclusion that Indian primary securities market played an important role in Indian economy. In the post- liberalization period after the abolition of CCI, resource mobilization from the primary market increases. There is no doubt that the industrialization influences the countries economic development. We know capital itself does not produce any output, unless other factor of production purchased with it, but it is the most important factor for industrialization and economic development. Primary securities market provides the channels for capital requirement and accelerates the economic development of the country. The existence of deep and broad primary securities market is absolutely crucial for the growth of our country. It is essential for India to develop its primary securities market and make it transparent to provide alternative sources of funding for companies and in doing so, achieve more effective mobilization of investors' savings. 35 P a g e

18 Notes & References 1. Bajpai, G. N. (2003). Significance of securities market in the growth of an economy: - An Indian Context. SEBI Bulletin, Vol. 1, Part 3. March, Pp Khan, M. Y. (2011). Indian Financial System. Tata McGraw-Hill Pvt. Ltd., p Khan, M. Y., op.cit., p Mohan, R. (2004). RBI Bulletin. March Gupta, L. C. (1996). Challenges before Securities Exchange Board of India. Economic and Political Weekly. Vol - XXXI No. 12, March 23, Bhole, L. M. (2004). Financial Institutions and Markets. Tata McGraw Hill Publishing Company Ltd. p Khan, M. Y. (1977). New Issue Market and Company Finance. Economic and political Weekly. Vol. 12. No. 2 (February 26, 1977). 8. (1978). New Issues Market and Finance for Industry in India. Allied Publishers, Bombay. 9. Narta, S. S. (200). Underwriting of Capital Issues in India- Progress & Practice. Finance India, Vol. X, No. 3 September Khambata, F. & Khambata, D. (1989). Emerging Capital Market: A Case study of Equity Market in India. The Journal of Developing Areas. Vol. 23. No. 3 (April., 1989), pp Patil.R.H. (1986). Raising Funds from the Capital Market: Challenges for the Private Sector. Vikalpa. Vol. 11, No. 1, January-March 12. Lalitha. N. (1995). Public Issues by Private Corporate Sector. Economic and Political Weekly. May 27, Pp M-63-M Schumpeter, J. (1924). Theory of Economic Development. Translated by Redvers Opie. Harvard University Press. 14. Levine, R., and Zervos, S. (1996). Stock Market Development and Long-run Growth. World Bank Economic Review, 10 (2): Pp P a g e

19 15. Mishra, P.K. Mishra,U.S. Mishra,B.R. Mishra, P. (2010). Capital Market Efficiency and Economic Growth: The Case of India. European Journal of Economics, Finance and Administrative Sciences. Issue 27 (18). Pp Jadhav, N. (2000). Development of securities market-the Indian Experience. Retrieved from Roy. M. K. (January 27, 2001). Stock market in a liberalized economy Indian Experiences. Economic & Political Weekly. Vol 36, No. 4. Pp Ministry of companies Affairs. Retrieved from Glen, J. and Madhavan, A. (1998). Primary Securities Markets in Emerging Nations: A Case Study of Peru. Working Paper, University of Southern California. Pp Henderson, B. J. Narasimhan, J., Michael, S. W. (2006). World markets for raising new capital. Journal of financial economics. Retrieved from chpublishedversion.pdf 22. Henderson, R. F., (Mar., 1948). The Significance of the New Issue Market for the Finance of Industry. The Economic Journal. Vol. 58, No Pp Goel, K., Gupta, R. (2011). Impact of Globalization on Stock Market Development in India. Delhi Business Review X Vol. 12, No. 1 (January - June 2011). Pp Sathish, A., Kumar, B. Anusha (March 2011). Reforms in Indian Primary Market A View. Indian Journal of Commerce & Management Studies. Vol II, Issue 2. Pp P a g e

20 25. Desai, S. (2000). Poor secondary market hits primary issues. Indian Express Newspapers (Bombay) Ltd. November 20, Verma, D. (November 30, 2001). Primary market round-up. Economic Times. 27. Haldea, P. (Jan 10, 2004). PSUs to the rescue of primary market. Economic Times. 28. Dalal. S. (2004). Bringing A SMILE To The Primary Market. Financial Express. August 30, Gurav, V. (May 26, 2004). Slack primary market awaits policy signals. Economic Times 30. Concerted efforts must for primary market revival. (August 17, 2003). Financial Express. Retrieved from 38 P a g e