THEBUSINESSBYTES BUREAU

BHUBANESWAR, MAY 18, 2026

India’s financial markets have demonstrated remarkable resilience amid mounting global uncertainties, supported by disciplined domestic investors, deepening regulatory reforms and expanding participation from emerging regions, Securities and Exchange Board of India (SEBI) Chairman Tuhin Kanta Pandey said in Bhubaneswar on Monday.

Interacting with media persons after an Investor Awareness Programme organised by Association of Mutual Funds in India (AMFI) here today, Pandey said the ongoing West Asia crisis has triggered significant global economic disruptions through oil-linked price and supply pressures, but India’s markets have shown notable stability in the face of these challenges.

 “The present crisis carries far-reaching global implications, particularly because of its impact on energy markets. It has triggered both supply-side and price-related shocks across economies, creating inflationary pressures and secondary effects on growth worldwide. Despite these uncertainties, Indian markets have displayed considerable resilience,” he said.

Pandey noted that domestic investors have continued to anchor the markets despite corrections and sustained foreign institutional investor (FII) outflows since September 2024, reflecting the growing maturity and confidence of Indian retail participation.

Highlighting the transformation of India’s financial ecosystem over the past decade, the SEBI Chairman said the country’s capital markets have evolved into a powerful engine of economic growth, capital formation and household wealth creation.

India’s market capitalisation, he said, has expanded nearly fivefold from around ₹95 trillion in FY16 to almost ₹463 trillion by April 2026, while the corporate bond market has grown from ₹20 trillion to nearly ₹59 trillion during the same period.

 “Even in a challenging global environment, India’s capital formation momentum has remained intact. During FY26 alone, the country witnessed 366 IPOs, while several advanced economies struggled to see meaningful primary market activity. This reflects the confidence of entrepreneurs, investors and institutions in India’s long-term growth trajectory,” he said.

Pandey added that around ₹13.6 trillion was mobilised through equity and debt markets during the last financial year, underlining the increasing depth and dynamism of India’s financial markets.

He said one of the strongest indicators of financial democratisation has been the rapid expansion in retail participation. India now has nearly 145 million unique investors, compared to just 38 million in FY19.

The mutual fund industry, too, has witnessed exceptional growth, with assets under management increasing from ₹12 trillion in FY16 to nearly ₹82 trillion by April 2026. Monthly SIP inflows have surged from about ₹3,000 crore in April 2016 to more than ₹31,000 crore in April 2026.

 “This sharp rise in SIP participation reflects a significant behavioural shift among Indian households towards disciplined, long-term investing and wealth creation,” the SEBI Chairman observed.

At the same time, he stressed the importance of broadening financial inclusion across regions and demographics. Referring to SEBI’s Investor Survey 2025, he said while awareness about securities market products has reached nearly 63 per cent of Indian households, actual participation remains limited to only 9.5 per cent.

“Our focus should not only be on growth, but on inclusive growth. A much larger section of households, especially from rural India, still needs to be integrated into formal investment channels,” he said.

Pandey said Odisha is emerging as an important participant in India’s expanding financial landscape. Investor participation from the state has increased more than tenfold over the past decade, rising from around 2.5 lakh in FY15 to nearly 28.5 lakh in FY26.

He said Odisha currently has nearly 15 lakh unique mutual fund investors holding close to 59 lakh folios with assets worth around ₹71,000 crore.

 “Odisha is steadily positioning itself as an important contributor to India’s financial growth story. To strengthen investor outreach and deepen market engagement in the region, SEBI will soon establish an office in the state capital,” he announced, adding that the rental agreement for the office would be signed today.

Another focus of Pandey’s interaction was the growing importance of municipal bonds as a long-term financing mechanism for urban infrastructure development. Describing municipal bonds as one of the world’s most significant instruments for financing urban growth, he said India’s municipal bond market has the potential to emerge as one of the country’s largest capital market segments over the next 15 to 20 years.

He noted that policy support through recent Union Budgets are encouraging Urban Local Bodies to increasingly access capital markets for infrastructure financing.

According to Pandey, 22 Urban Local Bodies across India have collectively raised over ₹4,500 crore through 31 municipal bond issuances till FY26.

He said Odisha too could adopt the instrument as a critical pillar of its future development financing strategy.

 “With broader public participation, municipal bonds can evolve into a major source of funding for Odisha’s urban infrastructure ambitions. Investments in such instruments are not merely financial transactions — they represent direct participation in the development of cities, states and the nation itself,” Pandey said.

He further observed that mutual funds are also contributing indirectly to infrastructure creation through investments in debt instruments, including corporate and municipal bonds.

On the issue of emerging technological risks, the SEBI Chairman flagged concerns over advanced artificial intelligence tools and their potential misuse in cyberattacks and market vulnerabilities. Referring to AI firm Anthropic’s Claude Mythos platform, he warned that such technologies could significantly accelerate the identification and exploitation of vulnerabilities if misused by malicious actors.

 “Certain next-generation AI systems are capable of identifying vulnerabilities far more rapidly than conventional tools. If such technologies fall into the wrong hands, they could amplify cyber risks substantially. Regulators and market institutions therefore need to stay ahead of these evolving threats,” he cautioned.

Pandey said SEBI has already taken proactive measures and was among the first regulators globally to issue formal advisories on AI-related cyber risks. He said accelerated patch management systems, stronger incident response frameworks and the formation of a dedicated “cybersuraksha.ai” group are helping safeguard the country’s securities ecosystem.

On algorithmic trading, he clarified that while algorithm-driven systems are permitted, they remain subject to strict governance and transparency norms.

 “Algorithmic trading is permitted within a tightly regulated framework. Such systems must undergo rigorous exchange-level simulations before deployment, and investors must receive adequate disclosures wherever advisory services are algorithm-driven. Transparency remains central to market integrity,” he said.

Earlier, addressing the Investor Awareness Programme organised by AMFI, the SEBI Chairman highlighted the increasing role of capital markets in mobilising household savings into productive investments through diversified instruments such as equity, debt, REITs, InvITs and municipal bonds.

He also outlined several investor protection initiatives undertaken by SEBI, including validated UPI mechanisms, SEBI Check and simplified nomination processes.

Referring to the launch of Project Jagrook, he said the initiative would adopt a multilingual and integrated outreach strategy to strengthen investor awareness and financial literacy across the country.

Speaking on the occasion, Venkat Chalasani, Chief Executive of AMFI, said deeper participation from emerging India would shape the next phase of growth for the mutual fund industry.

“The next phase of growth for the mutual fund industry will be driven by deeper participation from emerging India. Rising awareness, disciplined investing through SIPs, and expanding financial inclusion are enabling more households to participate in India’s long-term growth story. AMFI remains committed to strengthening investor awareness and promoting informed financial participation across the country, paving the way for a faster transition toward a Vikshit Bharat.”

Discussions during the programme focused on strengthening participation from B-30 cities and women investors. Industry data shared during the event showed that B-30 locations now contribute nearly 19 per cent of the mutual fund industry’s total assets under management, while women account for more than 25 per cent of unique mutual fund investors nationwide.