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BW Businessworld

Stock Market: New Man At The Helm

India’s premier exchange is looking ahead even as newcomer Vikram Limaye wants to set things right

Photo Credit :

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If one thing emerges crystal clear from the first two weeks of Vikram Limaye’s leadership at the NSE, it’s that the man is in a hurry to set things right. In barely a few days of joining the National Stock Exchange, the CEO & MD of the bourse filed the consent application with Sebi for a case that dogged the NSE, which alleges that the exchange unfairly gave access to a few brokers and algorithm traders.

For Limaye and the NSE, the consent application is a major move forward, which will pave the way eventually for a long-pending initial public offering, which has been stuck due to regulatory scrutiny. Consent applications are like negotiated settlements where a penalty is imposed on such entities. Says Limaye on the application: “It is an application to settle the matter without admission of guilt or wrong doing. The amount and terms would be mutually agreed based on discussions with Sebi.”

For one of the world’s largest exchange that ranks among the top 3 in number of trades in the derivatives market, it is an issue that has dogged the exchange for a few years now. Now, the soft-spoken Limaye has been thrust into the spotlight with the task of negotiating the terms of settlement with Sebi. It is a process that is likely to take a while as such matters go, but Limaye is hopeful that the matter will be resolved soon. “My hope is that it will be resolved in the next six months,” says Limaye.

The IPO Dream

If the issue does not get a speedy resolution, NSE’s IPO could see further delays. NSE is among the world’s largest exchanges in derivatives, handling a humongous amount of volumes that pitches the exchange in the top two in the world. The exchange has seen over 3 billion derivative contracts changing hands in 2015, and this trading volume is only rising.


“NSE is an institution of national importance. You don’t want overhang of investigations for too long which could be the case if this was to go through the court process. We would like to resolve the issue and move on and that I believe will also be in the best interests of markets and investors domestically and globally,” says Limaye. It’s an issue that all stakeholders would like to see resolved. Earlier in July, its chairman Ashok Chawla in a letter to employees said that the exchange is going through tough times due to technical and organisational issues. “Challenges (are) on the organisational front, stress over legacy technology issues, re-energising of relations with the stakeholders across the spectrum, from regulator to shareholder,” Chawla wrote in the letter. He also expressed optimism on overcoming the problems.

Bouncing Back

NSE has a market share of over 85 per cent in the equities trading segment, and 94 per cent in the equities derivatives segment. NSE has also been one of the largest exchanges in terms of total and average daily turnover within the first year of its operations back in 1994.

Hence, Limaye also had to oversee a submission to Sebi on the trading glitch that hit India’s biggest stock exchange. This glitch halted trading for three hours on the NSE on 11 July, days before Limaye joined, which he attributes to an interface breakdown of its systems.

A few days later into the new role as the CEO, Limaye also witnessed a historical moment. The NSE’s flagship indice, the Nifty 50, scaled a new peak and crossed the important 10,000 mark for the first time in its 22-year history.

For NSE, however, despite it being India’s premier exchange, some of the needs of corporates is to bridge the debt funding gap in the economy. Limaye believes that the Indian bond market needs to be developed, and products such as interest rate futures and credit derivatives need to see the light of day. Limaye also notes that the NSE has applied for a corporate bond repo product, and some shorter duration index products.

So, it has been an eventful first few weeks at the helm for Limaye. For the man, though, the challenge of steering a business through difficult times is nothing new.

But the good thing is that NSE has a strong and enviable business in the transactions business having a lion’s share of the derivatives market. Limaye just has to build on that, and before long, the NSE should be out of the woods.