Full text of Sebi chairman Tuhin Kanta Pandey’s speech at Fortune India 40 Under 40 celebrations: ‘Public capital comes with public accountability’

Tuhin Kanta Pandey, chairman of the Securities and Exchange Board of India (Sebi), addressed the audience on August 26 at the Fortune India 40 Under 40 event in Mumbai that celebrated India’s brightest young business minds, who are shaping the vision of Viksit Bharat.

The event was graced by Chirag Paswan, Union Minister of Food Processing Industries, as the Chief Guest, while the Guests of Honour were Nara Lokesh, Minister for Information Technology, Electronics and Communications, Real Time Governance and HRD, Government of Andhra Pradesh; and Sebi Chairman Tuhin Kanta Pandey.

Here is the full text of the Sebi Chairman's speech:

Shri Nara Lokesh, Hon’ble Minister for IT, E&C, RTG and HRD, Government of Andhra Pradesh, Shri Shashwat Goenka, Vice-Chairman, RPSG Group, Shri Sourav Majumdar, Editor-in Chief and Senior editors of the Fortune India, distinguished business leaders being recognized today, Ladies and Gentlemen, good evening to you all.

I am delighted to be here with you. ‘Forty Under Forty’ is an interesting milestone. You are being recognized for what you have achieved early in your careers, but your larger contribution may still lie ahead.

This year's list brings together two distinct kinds of leaders: first-generation founders creating new markets and a new generation taking forward established businesses. One builds from scratch, while the other must reinvent without losing what is valuable. Both will shape the future of Indian enterprise.

India’s Moment: Opportunity at Scale

You are building businesses at a time when India offers an unprecedented scale of opportunity. A favorable demographic dividend, rising aspirations, fast developing infrastructure, policy reforms and an increasingly formal economy are creating a strong foundation for growth. Demand is expanding across the country, opening new opportunities for enterprise. A growing network of free trade agreements (FTAs) can open new markets and enhance India’s integration into global supply chains.

This gives your generation a large canvas for enterprise- serve a growing market, create new markets and reach parts of India that remain underserved. You can develop scalable solutions that expand skill building. And businesses that learn to serve India at scale can build capabilities that also help them compete globally.

From Enterprise Creation to Capital Formation

Entrepreneurship is often celebrated through valuations, funding rounds or market share. These parameters matter. But the deeper test is what an enterprise adds to the economy.

Does it solve a real problem? Does it create productive capacity and employment? Does it build technology, intellectual property and sustainable value for those who invest in it and work for it?

The best enterprises create ecosystems around themselves - suppliers, livelihoods, skills and new entrepreneurs. As you scale, the larger opportunity is to move from building companies to building national capability. Your contribution can then extend well beyond the enterprise you lead.

Many of you are already building such capabilities. But ideas alone do not create economic value. Execution matters. India needs entrepreneurs who can imagine the future. It also needs leaders who can execute - build factories, manage supply chains, develop technology and deliver at scale.

And once an enterprise is ready to scale, the next question is - where will the capital for that growth come from?

Capital Markets: From Growth Capital to Public Accountability

Indian enterprises today can access capital at different stages - from venture capital and private equity to AIFs, public equity and corporate bonds. This breadth of financing can help businesses scale, widen ownership and attract long-term domestic and foreign investors.

For many of you, public markets may become an important part of that journey. I would urge you not to view them simply as a fund-raising event or an exit route. Public markets can be long-term partners in growth.

Public markets can finance expansion and innovation, diversify funding, create liquidity and allow more citizens to participate in the value created by an enterprise. Public markets also impose a useful discipline. Companies have to explain their strategy, capital allocation and performance to a much wider set of stakeholders. Over time, this discipline can strengthen institutions.

But there is an important distinction. Being able to raise public capital is not the same as being ready for public capital.

Once you access public money, you become accountable to a larger set of shareholders, many of whom are investing household savings.

Public capital, therefore, comes with public accountability.

As your enterprises grow larger and more complex,how will you ensure that governance grows with them?

Governance: From Control to Stewardship

Many of you are founders. Others come from promoter families. As your organizations grow, an important transition must take place: from control to stewardship.

A founder may begin by thinking, “This is my company.”

A steward asks a wider question: “Whose capital am I responsible for?”

Good governance is not merely about complying with a checklist. It is about making decisions that preserve trust, including when the rule book does not provide an obvious answer.

Start with the board. Do not build a board only to meet a regulatory requirement. Build the board your company will need five or ten years from now. Bring in expertise and wisdom that matters-for opportunities and challenges.

Independent directors should question, challenge and help find better solutions. For that, they need the right information, enough time to deliberate and the freedom to disagree.

A strong board should also be willing to ask key questions early. Which assumptions are we making? How strong are we on data and potential options? Will this decision appeal to our shareholder who does not sit in the room?

Such questions can prevent small governance concerns from becoming larger failures.

Minority shareholders deserve particular attention. They expect good governance, but they also invest for returns. There is no inherent trade-off between good governance and business performance. In fact, both complement each other.

The link between the two is trust. Trust, therefore, is an economic asset. It influences investor confidence, access to capital and the willingness of shareholders to stay invested through difficult periods.

You will have to earn this trust.

Innovation, Reinvention and Strategic Capability

The range of businesses also show how quickly the frontier is moving - artificial intelligence, semi-conductors and electronics, deep tech, electric mobility, clean energy, space, fintech, biotechnology, digital platforms, new-age consumer companies and advanced materials.

India should not remain only a market for technologies developed elsewhere. In many of these areas, technological capability is increasingly strategic. Your generation has the opportunity to build that capability in India, own intellectual property and take Indian innovation to the world.

That requires a stronger culture of Research and Development. India’s spend on R&D has remained in the range of around 0.6-0.8% of GDP in recent years, significantly below several major economies. Closing this gap will require a larger and sustained contribution from industry. But R&D investment needs a long-term horizon. It cannot always be judged quarter by quarter. It requires patience, experimentation and boards willing to back long-term capability building. Innovation also brings new challenges.

AI can improve productivity and decision-making, but poor governance can create bias and accountability problems. Cyber incidents, data breaches and technology dependencies can also disrupt operations. Technology must, therefore, be a Board priority. It is no longer merely an operational concern - it is central to business continuity.

Leadership Beyond the Balance Sheet

Finally, your role extends beyond your own companies. Recognition brings visibility. Visibility brings responsibility.

Aspiring entrepreneurs will learn not only from what you build, but from how you raise capital, treat employees, respond to setbacks and conduct yourselves when nobody is applauding.

Daniel Goldman (1998, HBR) in his paper, “What Makes a Leader?”, finds that emotional intelligence is the sine qua non of leadership in the corporate world.

Jim Kouzes and Boris Posner (2003) in their book “Leadership Challenge” identify five practices of Exemplary Leadership:

First, Model the Way.

Second, Inspire a Shared Vision.

Third, Challenge the Process.

Fourth, Enable Others to Act.

Finally, Encourage the Heart.

You need to combine the best of both worlds - the values and institutional memory of established enterprise with speed and adaptability of the new economy. Knowing what to preserve and what to change will be an important test of leadership. Leadership is not about predicting every disruption. It is about adapting without losing direction.

Your influence must also extend beyond metropolitan India. A large part of India's next opportunity lies in Tier II and Tier III cities and beyond.

Ask not only how many customers you serve, but how widely you expand opportunity - through jobs, access to technology, finance and markets, and by enabling smaller entrepreneurs and producers to participate in the formal economy.

When growth reaches people who have had limited economic opportunities, enterprise becomes a force for inclusion as well as wealth creation.

Build technologies, brands and enterprises in India that compete globally. The question is not only whether global capital will come to India, but what the world will buy, use and value because it was built here.

As you do so, global investors will increasingly judge corporate India through the quality of your governance, capital allocation, innovation and integrity.

Each of you will carry a part of India's corporate reputation.

Concluding Remarks

Let me conclude. The Bhagavad Gita reminds us:

Whatever standard a leader sets, others follow.

That is, perhaps, the larger responsibility that comes with this recognition. Build enterprises that create value. Build institutions that deserve trust. And set standards that others will want to follow. In doing so, you will shape not only your own organizations, but also how the world sees corporate India.

My congratulations to all of you. I wish you every success.