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Capital Market in India

India's capital market plays a crucial role in the nation's economic development, serving as a platform for businesses to raise funds and investors to participate in wealth creation. This article delves into the intricacies of the Indian capital market, addressing its significance, challenges, advantages, and disadvantages.

One of the primary challenges facing the Indian capital market is the prevalence of market manipulation and insider trading. The Securities and Exchange Board of India (SEBI) has been actively working to curb these issues, but they persist, hindering the market's efficiency and fairness.

The capital market in India offers numerous advantages, such as facilitating economic growth, providing liquidity to investors, and enabling companies to expand through public offerings. SEBI's regulations, particularly under the Securities Contracts (Regulation) Act, empower the market to function transparently, fostering investor confidence.

However, the market is not without its drawbacks. Volatility, influenced by global economic factors, can lead to significant fluctuations. Additionally, regulatory compliance, while essential, can be perceived as cumbersome for smaller businesses aiming to enter the capital market.

Specifically, the Companies Act, 2013, governs the issuance and trading of securities. Section 23 of the Act outlines the regulations concerning the issue of shares at a premium, ensuring fair valuation and protection of investors' interests.

In conclusion, India's capital market is a dynamic and vital component of the nation's economic landscape. While challenges persist, regulatory bodies like SEBI play a crucial role in maintaining integrity and transparency. The continuous evolution of laws and regulations is essential to address emerging issues and foster a resilient and thriving capital market in India.

Written By: Ankita Paldiya - Manikchad Pahade Law College

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