New Delhi [India], January 10: Securities and Exchange Board of India (SEBI) Chairperson Madhabi Puri Buch revealed that the market regulator is exploring the use of artificial intelligence (AI) to expedite the approval process for IPO and mutual fund (MF) applications.
Speaking at the inaugural session of the SEBI Samvad symposium, Buch stated, “A large number of AI-driven projects are already underway within SEBI. One of the key applications of AI is to accelerate the processing of applications, allowing us to approve them even faster.”
Buch highlighted the significant improvement in processing times for IPOs and MFs. As of November 2024, only two IPO applications were pending approval for over six months, a marked improvement from eight such pending applications in March 2022. Similarly, for mutual funds, only one application was pending for more than six months, down from 69 in March 2022.
The introduction of AI is expected to further reduce approval timelines, which will be crucial as the Indian IPO market continues to grow rapidly. “In just the last nine months, we’ve seen equity raises amounting to 3.3 lakh crores. We expect this number to rise to about 4.3 lakh crores by the end of the year,” Buch said.
While equity capital raising has surged, Buch noted that certain primary market activities, like preference issues and rights issues, sometimes get overlooked. To address this, SEBI has introduced a Fasttrack rights issue process followed by preferential issues.
Buch also emphasized the importance of financial inclusion, proposing the introduction of a Rs 250 systematic investment plan (SIP) for mutual funds. “Just as capital formation is vital for economic growth, inclusion is equally important,” she added, urging State Bank of India Chairperson Challa Sreenivasalu to support the micro-SIP initiative through the bank’s mutual fund business.
The proposed Rs 250 SIP will be launched soon, though the official date has not been announced yet.
Additionally, Buch discussed the growth potential of Real Estate Investment Trusts (REITs), Infrastructure Investment Trusts (InvITs), and municipal bonds over the next decade. She also noted the growing weight of India in the MSCI Index, which has led to Indian equity markets automatically receiving a 20% share of global passive funds inflows.