Hardly any one who has been a long-term “insider” of the capital market has penned down his insights either in an autobiography or in third person. The market continues to be devoid of the inside information about the major developments that took place in the last few decades, besides, of course, the trivia that makes for interesting learning. This presumably could be because there are many dark sides of each episode that cannot be told to the public at large, as it would also implicate several renowned personalities.
The title of the recent book of Mr Mayya (or Mayyasaheb as he is now fondly and respectfully called by most) instantly raised my hopes of getting to know from an insider and a front-seat driver — non-biased, high-integrity, non-market player at that — the real story of the capital market in all its facets over the last 30 years. He does briefly mention the brokers’ meddling in the administration of the exchanges but does not elaborate. Very disconcertingly, he also confirms two of my major beliefs: frequent manipulation of share prices and insider-trading, but withholds the details. My hopes were probably misplaced. I can only wish that he would author another book which tells it all.
From a different perspective, the book, however, is rich in many ways. It is a compilation of 89 out of his 250 published articles over the last 20 years, which emphatically bring forth the scores of issues that have confronted the markets at various points of time, and the solutions that he has offered with ease for each of these. More significantly, many ills of the market still continue and as such the book is a good source for ideas for the growth and orderly development of the market.
Incidentally, my foray into the capital market also started around the same time as Mayyasaheb’s and I have read almost all these articles “live”, when they originally appeared in newspapers. Reading them again took me down memory lane. His articles demonstrate the passion that he carries. And he can afford to be brave. That he has survived gracefully the several highs and lows of the BSE and the market, and never got embroiled in any controversy, is a tribute to his knowledge and integrity. In one article, he even dares an ex-chairman of Sebi for taking undue credit for the entire capital market reforms.
Mayyasaheb’s exposure to the market has been long and varied. His writings, therefore, are brilliant exposes of almost all aspects of the market. This can be seen from the grouping of his articles in seven broad categories: An Overview of the Indian Stock Markets, Primary Market, Secondary Market, Protection of Investors, Reforms of Stock Exchanges, Future of Regional Stock Exchanges and Badla, Futures & Options. For ease, a freshly-written synopsis of the contents of the articles, chapter-wise and theme-wise, prior to each chapter has been provided.
One major theme that cuts across the entire book is his passion for the small investor. Very few people have been so vocal about them and Mayyasaheb’s fervour has not waned a bit. He is truly a champion of small investors. Every time I meet him even now, he comes out strongly with his concerns on a wide variety of subjects like minimum public shareholding in listed companies, elimination of the grey market, divestment of PSUs in favour of small investors, inefficacy of the super-regulator concept and speedy and adequate punishment to fraudsters combined with disgorgement/compensation to the wronged investors. I endorse all these suggestions. We both have also been suggesting for long that the abridged prospectus should be in a booklet form for easy reading. We both agree that new investors will mainly come through primary market and, therefore, that should be the focus. That appears to be now happening. One of our common concerns on refunds has now been answered by Sebi through the ASBA process.
Many of his suggestions on various aspects of the market have been accepted, in full or part. However, Mayyasaheb remains an unhappy person, because not enough has been done for the small investor. Unfortunately, this has hurt the book, making it repetitive as many of his suggestions are decades-old and are yet to be resolved and hence keep coming up in several later articles.
More From This Section
Some of his suggestions are, of course, contestable. These include bringing back some kind of controls on issue pricing, or providing a safety net for the retail investor, or rating of merchant bankers, or not allowing MNCs to delist, or revival of the regional stock exchanges, or a complete ban on preferential allotments. There is also, for example, no way to ensure his suggestion of a minimum of 40 per cent holding by retail investors post-listing as it would effectively mean a lock-in for them. Nevertheless, it is interesting to read his arguments on such issues.
In conclusion, this is a must-read book for everyone connected with the capital market. For the older generation, the book offers many situations that they can easily relate to. For the younger generation, the articles would provide a rare historical perspective of the Indian capital market. To the regulators, there are still many suggestions that would do the markets good if implemented. Academicians, students and researchers would, of course, benefit immensely from the insights provided in almost all the articles.
GLIMPSES OF INDIAN STOCK MARKETS
M R Mayya
Indian Institute of Capital Markets
357 pages; Rs 500