With increasing deregulation and liberalization of economic policies coupled with expanding technology and fierce competition (both domestic and international), the Indian financial scenario is undergoing a drastic metamorphosis. The capital market has been strengthened and financing options have widened. As a result, no participant can afford to be inward-looking. The multinationals' entry and the foreign capital inflow into Indian corporate sector are changing the scenario.

The Indian financial system is regulated and supervised by two government agencies under the Ministry of Finance, viz., the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (SEBI). With the enactment of SEBI Act 1992 and the constitution of SEBI, there have been far-reaching changes in the capital market, which include steps to provide guidelines for disclosures and investor protection. As a result, the Indian economy entered a transition phase from a semi-controlled to a market share-oriented economy from 1992.

Primary Capital Markets (PCM) in any country play a vital role in supporting technological progress and the economic development by channeling funds for investment in productive assets, contributing to long-term growth prospects of the economy. The direct influence of `capital market' is seen in the growth of corporate sector, that has reduced its dependence on banks as a source of finance to raise equity in PCM. Since the early 1990s, the industrial financing system is evolving in response to the emerging liberalized/deregulated/globalized economic environment.

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