'Indian markets are still domestically focused': Navam Capital MD calls for opening up for global listings

India's equity capital markets remain largely domestic in terms of the companies that list and raise money, and that needs to change as the economy scales up, Rajeev Mantri, Managing Director at Navam Capital, said on Monday. He called for Indian exchanges to be opened up to listings from across the world.

"India's equity capital markets are still domestically focused - we see listings of India-registered and India-focused companies only," Mantri wrote on X. "As the scale and scope of India’s economy increases, Indian exchanges should be opened up to listings from across the world. This will help to transform Mumbai and other emergent financial centers (over time an economy the size of India will have many financial hubs) into global financial centers."

He argued that wider participation and deeper markets are not just an economic goal but also a strategic one. "Having deep, wide capital markets will also add strategic heft to India's global positioning in relation to Western countries in particular. Hence, this type of reform is both economically useful and strategically force-multiplying!" Mantri said.

India's IPO market has already begun attracting major global interest, including listings by foreign conglomerates through their Indian subsidiaries.

Mantri cited a report by Nikkei, which reported that India's IPO market is drawing interest from South Korean corporate giants. "South Korean conglomerates, including LG and Hyundai, have successfully listed their Indian subsidiaries on the Indian stock market to raise capital and expand operations. LG Electronics India’s successful IPO, valued at Rs 1.13 trillion, highlights the growing appeal of India’s market, driven by its large population and potential for growth," he quoted from the report.

On Sunday, Sensex and Nifty fell nearly 2%, marking their worst Budget-day decline in six years, after Finance Minister Nirmala Sitharaman proposed a hike in the Securities Transaction Tax (STT) on derivatives. The finance minister announced that STT on futures contracts will rise to 0.05% from 0.02%. The Sensex ended at 80,722.94, down 1,546.84 points or 1.88%, while the NSE Nifty settled at 24,825.45, down 495.20 points or 1.96%.

Pranav Haridasan, MD and CEO of Axis Securities, said market concerns were centred on the change in derivatives taxation. "This comes on the back of higher capital gains taxes last year, raising overall transaction costs for market participants," Haridasan said. He added that the futures segment, by design, may not be the main source of retail excess that policymakers are attempting to curb.

Futures are a margined, risk-managed product and not typically the primary source of retail excess, which raises questions on whether higher STT will deliver the desired outcome or instead weigh on liquidity, participation and India's market cost competitiveness, he noted. "These concerns are being voiced by foreign investors and domestic traders, and are reflected in the immediate market reaction."

On Monday, the market staged a sharp recovery, with the Sensex rebounding nearly 1,000 points on value buying after the steep decline in the previous session. The benchmark closed at 81,666, up 943 points from the previous close. The Nifty also advanced 262 points to settle at 25,088.