MADURAI KAMARAJ UNIVERSITY

(University with potentials for excellence)

UGC- HUMAN RESOURCES DEVELOPMENT CENTRE

and
SCHOOL OF BUSINESS STUDIES
REFERESHER COURSE IN BUSINESS STUDIES AND COMMERCE
(From 16.11.2018 To 06.12.2018)

CAPITAL MARKET EFFICIENCY AND

DEVELOPMENT OF CAPITAL MARKET IN INDIA

Presented By

Dr. M.BHARATH, Ph.D.,

Assistant Professor in Commerce,
(Deputed from Annamalai University)
THIRU.VI.KA. Government Arts College,
THIRUVARUR – 610 003
 OBJECTIVES
The following are the objectives of the study as;

To know the concept of the capital market efficiency.

To highlight the trends in the capital market in India
 INTRODUCTION

 Companies are long term funds in the forms of debt and

equity from the capital markets.
 Finance managers should, therefore, know the ways in
which securities are traded and priced in the capital
markets.
 They should also know the procedures followed in issuing
securities.
 Securities will be fairly priced in the capital markets if they
are efficient.
 CAPITAL MARKET EFFICIENCY

 Capital Market facilitates the buying and selling of securities, such as shares and
debentures or bonds.
 They perform two valuable functions viz.,
Liquidity
Fair Price of Security
 The security prices have been observed to move randomly and unpredictability.
 The efficiency of security prices depends on the speed of price adjustment to any
available information.
 The more is the speed or quick of adjustment, the more efficient will be the
security prices.
 The capital market efficiency may, therefore, be defined as, “the ability of
securities to reflect and incorporate all relevant information, almost
instantaneously in their prices.”
 FORMS OF MARKET EFFICIENCY

 Finance theory refers to three forms of market

efficiency:
 Weak Form of Efficiency - Security prices reflect all PAST
information.
 Semi - Strong Form of Efficiency - Security prices reflect all
PUBLICALLY information.
 Strong Form of Efficiency - Security prices reflect all
PUBLISHED AND UNPUBLISHED (PUBLIC AND PRIVATE)
information.
 CAPITAL MARKET IN INDIA
 Pivotal role in the growth of an economy and development of the overall
financial system.
 Resources mobilisation and allocation Companies and Governments raise
long term funds.
 Includes Financial Institutions, Commercial Banks, Insurance Companies,
Stock Exchanges, Co-operative Banks, Investment Trust or Companies etc.
 Two Segments of the Capital Market Viz: Primary Market and Secondary
Market.
 Primary Market / New |Issues Market - Securities which are issued to the
public for the first time (equity and debt).
 Secondary Market – Resale of securities and securities have already been
issued through the new issue market are traded in the market .
PERFORMANCE OF PRIMARY MARKET

Table 1 Resources Mobilization From the Primary Market (Rs.in Crores)

Year
Name of the
Securities
2011-2012 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017

Dept. 4791 2217 15042 6912 4232 23893

Equity 11647 7446 3313 3872 18260 24432

Private
156634 237405 177561 221348 388988 419388
Placement

Source: Hand Book of Statistics on the Indian Securities Market, 2017(SEBI), and
RBI Annual Report, 2017.
 PERFORMANCE OF SECONDARY MARKET

Table 2 Secondary Market – Select Indicators for BSE and NSE

Year
Indicators 2011- 2012- 2013- 2014- 2015- 2016-
2012 2013 2014 2015 2016 2017
No. of Listed BSE 5133 5211 5336 5624 5911 5834
Companies NSE 1646 1666 1688 1733 1808 1817
Market BSE 6214941 6387887 7415296 10149290 9475328 10788709
Capitalisation
NSE 6096518 6239035 7277720 9930122 9310471 10618012
(Rs. In Crores)
Turnover (Rs. BSE 667498 548774 521664 854845 740089 998267
In Crores) NSE 2810893 270829 2808488 4329655 4234983 5455913
Price Earnings BSE 17.8 16.9 18.3 19.5 19.3 20.6
Ratio (%) NSE 18.7 17.6 18.9 22.7 20.9 21.6
Source: Hand Book of Statistics on the Indian Securities Market, 2017(SEBI), and RBI
Annual Report, 2017.
 CONCLUSION
India being an emerging economy needs innovation and reforms in the
capital market. Innovation and reforms not only add value in the existing
technology and system but also lead to decrease in the cost of capital
and moderate the risk exposure of the capital market instruments. There
has been a revolutionary change over a period of time. In fact, on
almost all the operational and systematic risk management parameters,
settlement system, disclosures, accounting standards, the Indian Capital
Market is at par with the global standards. The goal of SEBI is to make
the Indian Capital Market truly world class, competitive, transparent and
efficient. Let us dream to make our Indian Capital Market a benchmark
for the rest of the world.
THANK YOU
 MADURAI KAMARAJ UNIVERSITY
(University with potentials for excellence)

UGC- HUMAN RESOURCES DEVELOPMENT CENTRE

and
SCHOOL OF BUSINESS STUDIES
REFERESHER COURSE IN BUSINESS STUDIES AND COMMERCE
(From 16.11.2018 To 06.12.2018)

SUSTAINABLE TRIBAL TOURISM IN TAMILNADU

WITH REFERENCE TO KODAIKANAL

Presented By

Dr. M.SARAVANAN, Ph.D.,

Assistant Professor in Commerce,
(Deputed from Annamalai University)
Government Arts College,
KARUR