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SEBI woos retail investors

India's markets watchdog said on Friday it would push for better corporate governance and make firms disclose more information to bring back disillusioned retail investors who fled the scandal-ridden stock markets after heavy losses last year.

"One of the biggest challenges that faces the Securities and Exchange Board of India is how to bring back the retail investor," Gyanendra Nath Bajpai, who was recently appointed chairman of the watchdog, told reporters.

"Institutional participation can revive the markets but the vibrancy will come only through the retail investors," he said.

Market watchers say Bajpai needs to restore the credibility of the watchdog after a series of scandals, which involved allegations of rampant insider trading and price rigging, wiped out over $20 billion in shareholder wealth at one point.

"We would like to strengthen our surveillance mechanism that would help in bringing back the retail investors to the markets," Bajpai said.

Bajpai said the lack of good corporate governance was one of the main reasons that kept retail investors away from Indian markets despite significant improvements in trading mechanisms.

Bajpai said SEBI had plans to hold nationwide seminars to educate investors on their rights and the pitfalls in the market.

He said SEBI had initiated a pilot project which involves the electronic filing of financial information by 200 leading corporations and the project would be extended to cover 2,000 firms by April next year.

Under the electronic filing system, firms would provide quarterly results, break out revenues segmentally, give the latest shareholdings and give balance sheet data that would be available on their Websites.

Bajpai also had some advice for corporates wanting to raise funds through primary market issues -- don't overprice.

"Issues should be priced in a manner that leaves some profit on the table for the investors," Bajpai said.

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