Critical elements forming the new growth contour of capital markets

Recently, the FICCI hosted a day-long Funding Markets Conference. There was an uniform view that our markets are entering their following stage of development. The key concern was: what are the elements that will shape this brand-new growth curve? In this short article, I will go over several of the columns that will certainly drive this next stage.

Over the past three decades, India’s securities market have become some of one of the most liquid, dynamic, and significant on the planet. Since completion of 2024, our market capitalization had surpassed approximately $ 5 1 trillion. The last few years have actually seen a remarkable makeover. Given that 2019, the number of demat accounts has risen from 40 million to over 150 million by mid- 2024– a nearly fourfold boost. Retail participation has been additionally enhanced by the surge of SIPs (Systematic Financial Investment Strategies) and the quick expansion of the shared fund market, which is now getting to smaller cities and towns.

Over the next 5 to 7 years, markets are expected to increase in size. This growth will be driven by overall financial expansion and the formalisation of the economic climate, which is anticipated to transport $ 7– 12 trillion of savings into the economic field over the next years. A substantial portion of this will likely stream into our reputable funding markets. To transport this development constructively, I believe we need to concentrate on a few vital locations.

Deepening the Second Equity Market with Diverse Products

For many years, India’s equity markets have actually grown substantially. To absorb the expanding flows into the market, we need to broaden the product collection. This consists of ETFs , index funds , REITs , and InvITs , which will certainly help develop a stronger, more comprehensive investment landscape.

ETFs and Index Finances: Possessions under management (AUM) in ETFs have increased greater than fivefold considering that 2020 Yet, ETF infiltration in India continues to be significantly listed below international criteria. These affordable, passive products can deepen engagement and widen gain access to. Additional diversification right into possession courses such as gold, silver, products, and other financial tools can enhance market resilience.

REITs and InvITs: The combined AUM of InvITs and REITs has actually risen to virtually $ 100 billion in FY 2025, greater than doubling in simply five years. InvITs represent roughly 75 % of this swimming pool. Around the world, REITs and InvITs take care of over $ 2 trillion in properties. In India, nevertheless, REITs cover only around 10 % of the complete noted property worth– compared to more than 90 % in industrialized markets like the United States and UK. This space signals enormous growth potential.REITs and InvITs are evolving right into mainstream financing platforms for facilities and real estate. Their range is expanding beyond standard workplace and roadway possessions right into brand-new sectors such as storage facilities, resorts, medical facilities, telecommunications towers, renewable energy, and digital infrastructure. With policy assistance– such as Small & & Tool REITs, greater shared fund participation limits, and equity-like classifications– the sector can accomplish broader financier access and liquidity.Given India’s facilities financing needs, creating these platforms further is not just an opportunity– it is an essential.

Stablecoins: The Next Wave of Fintech Technology

The brilliant Act in the US has actually provided stablecoins global authenticity by mandating 1: 1 backing with fluid possessions, making sure openness and AML safeguards, and focusing on holders in personal bankruptcy. This strong move pushes stablecoins from the crypto fringe right into mainstream money.

India’s fintech ecological community, built on a robust electronic public facilities (Aadhaar, UPI, Account Aggregator, IMPS, NEFT, RTGS), can adopt a similar framework. By controling permissible companies, applying complete reserve backing, and mandating normal audits and disclosures, India can develop a safe, scalable, and regulated stablecoin atmosphere alongside its Digital Rupee effort.

In parallel, enabling the trading of generally illiquid possessions on electronic systems can open productivity and expand financial involvement.

A Unified Regulatory Coordination Framework for Faster Decision-Making

Presently, regulative control in the economic field is supervised by the Financial Stability and Advancement Council (FSDC), that includes the RBI and SEBI however does not have the important engagement of the Ministry of Corporate Affairs (MCA). Given the MCA’s vital role in corporate governance, relocating in the direction of an extra unified discussion forum that includes the MCA alongside the RBI and SEBI might help develop an extensive and cohesive oversight system, covering company regulation, financial guidance, and resources markets.

Such a setup could help in reducing regulatory gaps and overlaps, improve inter-agency coordination, make it possible for more timely reactions to arising risks, and enhance oversight in areas such as fintech, business governance, and threat disclosure. This integrated governing framework might further sustain ongoing reforms and help India’s monetary ecosystem adjust to fast market advancements.