New public offerings can absorb 'huge' FII inflows: SEBI | business | Hindustan Times
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New public offerings can absorb 'huge' FII inflows: SEBI

business Updated: Oct 12, 2010 15:29 IST

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Amid diverse views over the huge capital inflows into equity markets from FIIs, market regulator Sebi today said that numerous public offers coming to the market could absorb that money and act as a balancing factor.

If the inflows from foreign institutional investors (FIIs) chase same numbers of papers then obviously prices will rise, but issuance of new papers could absorb that, Securities and Exchange Board of India Chairman CB Bhave told reporters here.

"I am not saying whether FII inflows are a concern or not...I am saying balancing factor is issuance of papers," Bhave said. Fund flow from overseas investors has crossed the record Rs 99,700-crore (USD 21.6 billion) mark this year and is all set to breach the magical Rs 1,00,000 crore mark -- for the first time since they were allowed invest here.

State-run Coal India Ltd's mega initial public offering, through which the government aims to garner up to Rs 15,000 crore, opens next week. Some other big private as well as PSU public offerings are also in the pipeline.

On the issue of any need to curb the whopping capital inflows, Bhave said that it was for the government and Reserve Bank of India to monitor the situation.

"Capital inflows is something which government and RBI look at," he added. The whopping capital inflows have raised an alarm among regulators. The sharp rise in FII flows into Indian stocks has pushed up the market. The BSE benchmark Sensex climbed over 10 per cent in September, a month when the index re-gained the magical 20,000 level after a gap of 32-months.