India is implementing important corporate governance reforms that position the country's corporate governance framework above other emerging market economies, says a report published on Thursday by the Institute of International Finance (IIF).
However, the same report concludes, as is the case with many other countries there are flaws in the enforcement of the rules and regulations in the process.
The Chief Investment Officer of Global Emerging Markets, Alliance Capital Management, and Chairman of the Equity Advisory Group (EAG) of the IIF, Edward Baker, said, "Our report is being published as new Indian regulations are coming into effect with the aim of significantly strengthening the system of corporate governance."
"It is important that Indian corporate governance standards continue to improve as the country becomes an increasingly important participant in global trade and finance. It is encouraging that, as our new report points out, companies such as Infosys Technologies, the Tata Group, ICICI Bank and the Housing Development Finance Corporation Ltd (HDFC), are developing sound corporate governance approaches. These can serve as models for the thousands of listed Indian companies that have yet to put in place governance systems that meet the requirements set by the Indian authorities and that can enhance international investor confidence," said Charles Dallara, IIF Managing Director.
The IIF is the global association of financial institutions comprising more than 340 member institutions headquartered in over 60 countries operating across the world.
{{/usCountry}}The IIF is the global association of financial institutions comprising more than 340 member institutions headquartered in over 60 countries operating across the world.
{{/usCountry}}India has 22 stock exchanges and approximately 6,000 publicly listed companies with a total market capitalisation of India's stock markets of around $546 billion, as of December 30, 2005. Over 40 million people invest in shares and mutual funds in the country.
The ten largest companies account for more than one-third of total market capitalisation. Indian companies have been increasingly attracting foreign capital either through listing on international stock exchanges or through private equity placements and foreign institutional investments.