Improving Disclosure Standards in Indian Capital Markets
In India, regulators, institutional investors and corporate management teams are beginning to realise that the competition for capital is global, driven in large part by vocal investors who are raising the bar on transparency, disclosure and investor relations practices. Indeed, the once embraced principle of ‘disclosure only to the level mandated by law’ is gradually giving way to the principle of ‘voluntary disclosure’ and greater overall transparency.
While not a widespread practice yet, the reticence of Indian leaders to share information and business strategies is beginning to change, at least amongst the large-cap corporates. Alongside this, recent developments in the business landscape – notably a fresh round of regulations, a more empowered markets regulator and assertive institutional investors – indicate that there will be a trend towards greater transparency in the Indian capital markets in the next few years.
This general shift in the Indian capital markets is underway and it is shedding light on new issues and risks that management teams and boards of directors will need to manage and mitigate. Undoubtedly, new practices and skills will be required to support these shifting attitudes and navigate evolving regulations.