Interview with Mahavir Lunawat, Chairman of the Association of Investment Bankers of India

Empowering investors through education and awareness is a top priority for us, articulates Mahavir Lunawat, Chairman of the Association of Investment Bankers of India.

Could you briefly explain the new initiatives launched by AIBI to promote investor awareness and enhance the capacity of merchant bankers?
Seeking to empower investors and strengthen the investment banking community, the Association of Investment Bankers of India or AIBI has launched an array of nine thoughtful new initiatives, including an Investor Section on AIBI's website packed with educational resources, an animated video simplifying IPO investing concepts and a sample IPO video. AIBI has issued a revamped due diligence manual aligning with the latest regulations, a compendium consolidating advisories to keep professionals up-to-date, and a Standard Practice Manual for IPO documents.

AIBI has released an endearing new mascot named AIBI Chanakya embodying a learned, disciplined, and confident investment banker; and AIBI's new tagline "Creating a robust investment culture" capturing AIBI's mission. With these offerings bridging the information gap between industry and investors, AIBI promotes financial literacy, upholding diligence standards, propagating best practices, and contributing to a thriving investment ecosystem where all participants are equipped with the knowledge to make astute decisions.

Please share some insights from the recent industry discussions on the theme of 'Ease of Capital Formation'.
We trumpeted India's pole position in capital formation, with a record USD 20 billion raised via IPOs in 2023. The 90 per cent IPO premiums here in India versus 60 per cent below the issue price in the USA signal tremendous investor appetite in India.

In our discussion on ‘Ease of Capital Formation’ - Prithvi Haldea, Advisor, AIBI shared, that “For the Indian capital market to grow into the next orbit. It is pivotal to review and improve the ecosystem to cater to the issuers and merchant bankers. The nine initiatives aim to offer a transparent, information exchange platform powered by AIBI, enabling investors and merchant bankers to make informed decisions.

In the same gathering, Ananth Narayan G, Wholetime Member of SEBI, addressing the annual convention, asserted – “Merchant bankers have played a phenomenal role in helping the regulatory approval process become more efficient. Time taken in approval of AIFs have come down significantly thanks to the diligent efforts of merchant bankers.”

Also in attendance - Madhabi Puri Buch, Chairperson of the Securities and Exchange Board of India, said, "SEBI is making conscious efforts to reduce the time involved in the approval process for public issuance offer documents. AIBI's latest manual of standard practices and disclosures is a step in the right direction."

She also announced that SEBI will soon launch the in-house developed generative AI tool to expedite the clearance of IPO applications.

How are the three key stakeholder groups – regulators, stock exchanges, and investment bankers – collaborating to facilitate capital formation?

AIBI is working on capacity building, especially for new investment bank entrants. AIBI is issuing advisories and also coming out with manuals of standard practices. AIBI acts as a representative body and recommends policy reforms desired for capital formation. AIBI represents PMAC, AIPAC, SEBI EODB (Ease of Doing Business) committee, various expert committees/groups formed by SEBI, and stock exchanges from time to time.

AIBI has launched the Standard Practice Manual for IPO Offer Documents to streamline capital formation. How will this affect the industry ecosystem as a whole?

The primary aim behind introducing the standard practice manual for IPO offer documents is to bolster the quality of these documents while minimizing redundancy. AIBI has consolidated crucial insights from standard observations on recent draft offer documents.

This initiative aims to streamline practices, ensuring strengthened governance and adherence to evolved practices in the interest of investors.

As an industry representative, what are your views on investor awareness and empowerment, and what additional steps are being taken or need to be taken in this area?

Empowering investors through education and awareness is a top priority for us. We have launched innovative initiatives to achieve this goal. Sample IPO videos provide a standardized template for companies. Now, investors can easily compare offerings on our website. An animated explainer simplifying IPO investing in a simple, understandable way.

A dedicated Investor section packed with resources to boost financial literacy. It's the one-stop shop for investor education. Armed with knowledge, investors can make sound decisions, contributing to a robust capital market ecosystem. Informed investors are the most important element for healthy markets, and that's why we're leveraging technology like videos, animation, and dedicated portals to bridge information gaps.

We aim to equip investors at all levels through creative education. We're committed to continuous innovation that informs and empowers. We have launched a live database of ongoing IPOs and other corporate actions on the AIBI website, which is a very handy tool for investor reference.