An Appraisal of Security Investments by Indian Investors

Abstract

The Indian Security Investment Market is considered to be one of the earliest in Asia, which is in operation since 1875. Securities that are purchased in order to be held for investment. Investor "A person whose principal concern in the purchase of a security is the minimizing of risk, compared to the speculator who is prepared to accept calculated risk in the hope of making better-than- average profits, or the 'gambler' who is prepared to take even greater risks. More generally it refers to people who invest money in investment products." However, it remained largely outside the global integration process until 1991. A number of developing countries in association with the International Finance Corporation and the World Bank took steps to establish and revitalize their Security Investment Market s as an effective way of mobilizing and allocation of funds. In line with the global trend, reform of the Indian Security Investment Market also started with the establishment of Securities and Exchange Board of India (SEBI), although it became more effective after the Security Investment Market scam in 1991. An important feature of the development of stock market in India in the last 15 years has been the growing participation of Public and private investors, both foreign Public and private investors and the Indian mutual funds combined together, the total assets under their management amounts to almost 18% of the entire market capitalization. This paper examines the role of these investors in Indian stock markets and finds that the market movement can be explained using the direction of the funds flow from these investors.