Entities should not just rely on banks for funding. There is an urgent need to diversify funding sources such as capital raising from the primary markets, Ajay Tyagi, chairman of the Securities and Exchange Board of India (Sebi), said.

The Sebi chief also brought out certain “positive aspects of market recovery” from the panic that was seen in March following the declaration of the pandemic.

According to Tyagi, the recovery in the market has been broad-based with not only the large cap but also the mid- and small-cap indices participating in the turnaround.

His remarks come at a time many experts feel there was a disconnect between the economy and the markets and that abundant liquidity and low interest rates were the only factors responsible for the rally.

Tyagi was speaking at the 11th Financial Markets Summit organised by the CII.

According to Tyagi, “Some investments are best funded through the capital markets. For instance, it would be a challenging task to achieve the government’s target of having Rs 100 lakh crore investments in infrastructure by 2024-25 unless the bond market is adequately developed.”

The development of the corporate bond market needs “deeper structural and regulatory changes”, he added.