February 21, 2014

Press Release No. 1

NSE Organizes Investor Week to Spread Awareness, Empower Market Participants

FEBRUARY 21, New Delhi: India’s leading stock exchange, the National Stock Exchange (NSE) organised a week-long investor awareness programme in the Delhi National Capital Region (NCR) to create awareness among students, army personnel, industry bodies and corporates about the importance of financial planning, and growing money by following good investment practises. The purpose of the week long initiative is to bring more people into the formal financial system by encouraging them to choose right investment avenues.

Awareness sessions were conducted at MDI Gurgaon, IILM Institute for higher education, with Industry bodies like FIEO and NASSCOM and with employees of corporates. A stall was set up at the Delhi book fair to engage with book lovers on rights and obligations of investors and the need to invest in productive assets. The drive will conclude with an investor run on Sunday the 23^rd of February at the popular Thyagaraj stadium to encourage Delhiites to run for health and wealth.

At the investor run, participants can choose between the 4.5 km timed Nifty Run, the 4.5 km Power Run and the 3 km Bull Run.

Since 2011, 26 investor runs have been held in metros and cities like Pune, Bhubaneshwar, Kochi, Ahmedabad, Rajkot, Indore and Vadodara. Nearly 40,000 people have participated in the Investothon in the past three years.

While the focus in the investor week was on educating investors about exchange traded funds, like Nifty ETF, and the advantages of ETF’s for retail investors, rights and obligations of investors and the risk return relationship, NSE’s attention has also been focussed on offering opportunities to the hundreds of SMEs in the Delhi National capital region to raise much needed risk capital through NSE’s EMERGE SME platform or by listing on NSE’s new Institutional trading platform EMERGE ITP.

EMERGE ITP connects growing businesses to a pool of sophisticated investors such as private equity funds, high net worth individuals (HNI’s) and angel investors looking to invest in early stage ventures. It allows start-ups, young companies and SMEs to list cost effectively, without an initial public offering (IPO), and provides exit to the investors.

Addressing the press, NSE’s Chief Business Development, Mr Ravi Varanasi said ‘’Through EMERGE ITP we are bringing together growth companies and risk investors in a well regulated environment, enabling both sides to benefit from the discipline and transparency, to create a virtuous cycle facilitating flow of risk capital to growth companies.

SME’s can go in for private placements or rights issues to fund their growth. The platform will provide the companies with higher visibility and credibility. They can dilute stake to informed investors only on need basis to conserve value and attract and retain talent with ESOPs etc.

Risk investors who invest in such SME’s will be able to exit quickly, easily monitor invested portfolio and generate higher returns since exit from a listed company attracts only Securities Transaction Tax (STT) instead of Capital Gains tax.

Another recent offering from NSE has been the new NSE Bond Futures (NBF II) based on two GOI securities i.e. 7.16% and 8.83% 2023, available in the 9 to 10 year maturity segment.

An increasing number of market participants, including retail investors, are looking at this product with a view to using it as a tool to hedge their interest rate risk.

Market participants such as banks, primary dealers, mutual funds, insurance companies, FIIs, Corporates, trading members as well as retail investors can trade in this product. All categories of participants carry interest rate risk. Interest rate risk could arise from loans taken by a corporate entity, institution or an individual. Similarly investing in fixed income instruments like bonds, fixed deposits or even debt mutual funds creates interest rate exposure.