As vibrant primary market is important for overall health of the stock market, stock market participants have requested Government and the sector regulator Sebi to provide tax benefits for investors in the primary market and consider issuance of certain bonds as a safety net mechanism in IPOs.
Talking to mediapersons Association of National Exchange Members of India (ANMI) President RMCV Prasada Rao on Monday said tax incentives needed to be provided to bring in more investors into the capital market. He also added that some kind of convertible debentures should be issued by companies as a safety net in initial public offering (IPO).
"Optional fully convertible debentures/warrants should be given to investors which after a specific period can either be redeemed by investors or converted to shares at pre-defined interest or cut off price," said Rao.