Public offers can absorb huge FII inflows: Bhave

NEW DELHI: Market regulator Sebi on Tuesday said numerous public offers hitting the market could absorb the excess flows and act as a balancing factor even as the debate goes on whether large capital flows pose a threat to country’s macroeconomic situation.

“I am not saying whether FII inflows are a concern or not ...I am saying balancing factor is issuance of papers,” said Sebi chairman CB Bhave.

Fund inflows have crossed the record `99,700-crore ($21.6 billion) mark this year and is all set to breach the magical `1,00,000-crore mark — for the first time since they were allowed invest here. State-owned Coal India’s mega IPO, through which the government aims to garner up to `15,000 crore, opens next week. Some other big private as well as PSU public offerings are also in the pipeline.

On the issue of any need to curb the whopping capital inflows, Mr Bhave said that it was for the government and the central bank to monitor the situation. “Capital inflows are something, which the government and the RBI look at,” he added.

The whopping capital inflows have rung alarm bells in the RBI though the finance ministry has sought to play down the issue. The sharp rise in FII flows into Indian stocks has pushed up the market. The BSE benchmark Sensex climbed over 10% in September, a month when the index regained the magical 20,000 level after a gap of 32-months.