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Capital Markets of India: An Investor's Guide

Capital Markets of India: An Investor's Guide

Alan R. Kanuk

ISBN: 978-1-119-19873-4 October 2015 404 Pages

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Capital Markets in India: An Investor's Guide aims to provide the first comprehensive book on investing in the India markets. India is right now at the forefront of globalization. The book's focus is on the equity market, but it also addresses derivatives, fixed income, and foreign direct investments. Chapter topics include facts about the Indian economy; the Foreign Institutional Investor (FII) regulations, registration process, and applications; detail about the market regulation and the regulator; the very important market safeguards built into the Indian market systems; and lists of companies ranked by various criteria such as capitalization, turnover, industry, and earnings. The book even supplies investors and traders with contact information for many of the key institutions and market players. Readers will not only gain basic information about how the markets in India work, but also the contacts and facts to help them with their own investing plan.
List of Figures.

List of Tables.



About the Author.

Chapter 1. India’s Capital Markets.

Growth of Foreign Investment.

Improved FII Interest and Access to the Public Markets.

Rising Domestic Investment Demand.

Market Risks.


Chapter 2. Foreign Portfolio Investment in India.

Foreign Investment.

Tax Considerations for FIIs.

Repatriation of Investment Funds.

Challenges for US Hedge Fund FIIs.

Financial Instruments Available to FIIs.

Investment Limits.

Brokerage Fees.

FII Application Procedures.

Trading and Settlement-Related Issues.

Summary of FII Investment.

Chapter 3. Foreign Direct Investment.

Ministries and Departments Administering FDI.

Foreign Investment through Global Depository Receipts (Euro Issues).

Approval Process for FDI.

Industrial Sector Preference.


Chapter 4. Safety and Integrity: The Regulator and Market Safeguards.

The Securities Exchange Board of India (SEBI).

Market Safety and Safeguards.

Disclosure and Transparency Rules.

Exchange Surveillance.

Stock Exchange Risk Systems.

Market-Embedded Safeguards to Control Abnormal Stock and Market Behavior.

Margin Controls.

Additional Risk Controls for Derivatives.

Stock Exchange Central Counterparty Role.

Guarantee Funds.

Inspection of Brokers’ Books.


Chapter 5. The Equity Market: Stock Exchanges, Trading and Settlement.

India’s Stock Exchanges.

Exchange Trading Rudiments.

Exchange Trading Systems.

Trading Features of the Exchanges.

Exchange Settlement Systems.

Approved Clearing Banks.

Exchange Clearinghouses.



Settlement Preparation for Short Selling.


Chapter 6. Derivatives.

Indian Derivatives Market Fundamentals.

BSE Derivatives.

NSE Derivative Products.


Chapter 7. The Indian Debt Market.

Indian Debt Market Fundamentals.

Market Infrastructure.

Market Structure.

Debt Trading.

Clearing and Settlement.

Risk Management.

Brokerage Rates.

Reference Rates.


Chapter 8. Indices: General Market and Sector Specific.

BSE-Sponsored Indices.

NSE-Sponsored Indices.

Appendix A: Facts and Figures About India.

Appendix B: India’s Unique Numbering System.

Appendix C: The Indian Time Zone.

Appendix D: BSE and NSE Derivatives Underlying Stock Details.

Appendix E: Economic Statistics.

Appendix F: Order Types.

Appendix G: NSE and BSE Equity Classifications.

Appendix H: Exchange Trading and Clearing Holidays.

Appendix I: Index Constituents.

Appendix J: Calculation of NSE Option Base Prices.

Appendix K: ADR/GDR vs. Ordinary Share Arbitrage – An Example.

Appendix L: Major Financial Institutions in India.

Appendix M: Contact Information for Important Financial Service Institutions.


Acronyms and Abbreviations.