Ensuring Market Access for Responsible Companies in India's Economy

BSE CEO Sundaraman Ramamurthy Stresses Ethical Market Access and Long-Term Economic Vision

Mumbai | January 21, 2025 — In a candid address at the 13th Annual Convention of the Association of Investment Bankers of India (AIBI), Sundaraman Ramamurthy, Managing Director and CEO of BSE Limited, underlined the need for strong ethical intent—not just compliant documentation—as a prerequisite for companies seeking to enter India’s capital markets.

“If a company has bad intentions, whether its paperwork is sound or not, it should not be permitted in the market,” Ramamurthy stated, highlighting the regulator’s and exchange’s shared responsibility in maintaining the sanctity of India’s public markets.

Ethical Access: A Gatekeeping Priority

Ramamurthy’s remarks come at a time of heightened scrutiny over IPO quality and post-listing conduct. While acknowledging that improved documentation and compliance are welcome, he cautioned against relying solely on paperwork to assess the merit of an issuer.

Instead, he called on merchant bankers and exchanges to look beyond form and into substance—scrutinising a company’s true motivation for raising funds and its track record of governance.

Key Points from Ramamurthy’s Remarks:

Sound paperwork ≠ sound intentions: A company’s documentation must be matched by credible, ethical business intent.
Market gatekeeping must be holistic: Entry should be restricted to businesses that are not only financially viable but also transparent and accountable.
Investor protection is paramount: Exchanges and regulators must remain vigilant to prevent market misuse by opportunistic entities.

The Macroeconomic Lens: Unlocking India’s Financial Potential

Expanding beyond compliance, Ramamurthy offered a macroeconomic perspective on the role of capital markets in nation-building.

He noted that with India’s GDP currently at ₹420 lakh crore, even a modest allocation of 25% toward financial assets could translate into a potential annual inflow of ₹30 lakh crore into the markets.

He further projected that if market capitalisation keeps pace with GDP growth, India could eventually reach a $50 trillion market cap—a vision aligned with the country’s long-term ambitions to become a global economic powerhouse.

“We are at the cusp of a transformational phase. Financial markets have the depth and capacity to mobilise national wealth for productive growth,” he said.

The Employment Equation: Markets as a Solution

Shifting focus to employment, Ramamurthy addressed the paradox of India’s growing skilled workforce and limited formal job absorption.

Each year, over 1.5 million engineers graduate, but only 20% secure formal employment.
The remaining majority turn to entrepreneurship or self-employment, often struggling to access institutional funding.

Ramamurthy argued that this demographic challenge also presents a market opportunity: capital markets must evolve to support early-stage ventures and non-traditional entrepreneurs, enabling them to tap into equity or debt at scale.

Three Pillars of Economic Growth Highlighted:

Consumption: Sustained domestic demand across income segments.
Investment: Steady capital formation in both public and private sectors.
Exports: Competitive global integration to support scale.

Conclusion: Building Trust, Unlocking Growth

Sundaraman Ramamurthy’s address offered a clear reminder that integrity must remain at the heart of market access. His dual emphasis—on screening for ethical intent and on unlocking India’s financial and entrepreneurial potential—resonates with SEBI’s own shift toward proactive regulation and capital market democratization.

In sum, India’s journey toward a $50 trillion market cap isn’t just a function of economic math—it’s built on trust, transparency, and disciplined financial intermediation.

As India’s capital markets continue to deepen, the responsibility of gatekeepers—exchanges, investment bankers, and regulators alike—will be central to ensuring that access remains a privilege earned through accountability, not just documentation.