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Awarness - The First Step

| 5/23/2011 3:11 PM Monday

For a population of more than one and a half billion the size of those who are actively investing, particularly in the equity markets, has always been a point of concern. From policy makers to regulators and various intermediaries who form a part of this very vibrant ecosystem, the lack of participation of the masses has always been a subject of debate. Despite the best efforts it has not reached a meaningful level and hence has not been instrumental in creating inclusive growth. India is among the fastest growing economies - probably only next to China - and in order to broad-base the benefits of this growth among the masses what is really required is to channelise the vast savings potential of the population into proper avenues which could fetch them good returns over a period of time.

This is however no mean task. The higher savings rate of the Indian population itself speaks about how funds are not being deployed into wealth creating avenues in a meaningful manner. Indians at best are happy to plough back their savings into safer havens like bank fixed deposits or the old and familiar post office schemes which they feel are far more secure. This naturally leaves a major part of the population outside of the scope of capitalistic growth that is being offered by many other avenues, particularly the equity markets.

This is exactly where creating awareness among investors becomes very important. But is investor awareness only about trying to tell investors of the do’s and don’ts while putting their money in the market? Our experience tells us otherwise. From the various programmes that we at DSIJ have conducted very recently through-out a large part of northern India, there seems to be something more that investors are looking out for than what is being offered to them in the name of creating awareness. From first-time investors to those who have burnt their fingers in the market and from the risk-averse to those who have managed to make money by taking risks, what is needed is far more than what is being done. We are not at all suggesting that everything can be done at one go. But there are a lot of initiatives that are presently stepping up their efforts in this direction.

We at DSIJ have gained a whole lot of experience in the wake of con-ducting the first leg of our Investor Awareness Programme (IAP) through-out the northern part of India. We have realised that there is a much larger need for more such programmes only from the experience that we have gained thus far. Reaching out to investors across various classes and across the length and breadth of the country is far more important than just trying to focus on metros, Tier I or Tier II cities. This is amply reflected in the response that our programmes have generated in smaller towns like a Varanasi in Uttar Pradesh or a Ludhiana in Punjab.

While education about the how’s and where’s of investing for those who are new to the market is a very critical element which needs to be handled, it is also important to create a solid plat-form for handling investor grievances. Look at what one of the participants at our programmes had written to us. “If a promoter is not corresponding with the exchanges it is his fault, why penalise investors for this? Why are investors being punished by suspending the company? There are around 1,600 companies which have been suspended by the BSE. Something needs to be done in the interest of investors who have invested their money in such companies and do not have an exit option,” said Nikhil Gupta from Kanpur. 

This is not a one-off case. There are issues which have been languishing for years without being addressed properly. “We have deposited in FDs of Morepen Laboratories and instead of paying any amount back to us on maturity, the company has issued shares to those who had invested in the FDs. The company claims to have done all this through a sanctioned scheme of arrangement of the High Court of Himachal Pradesh. We have never applied for shares nor have we moved any court or CLB for any purposes. We want the payment as per what was contracted for which we have made several requests to the company,” stated Awadhesh Kumar Misra, a participant of the IAP held in Lucknow

 

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