Limaye said no to a second term; New CEO to conduct NSE’s IPO

“I have informed the board that I am not interested in a second term and, therefore, will not apply or participate in the process that is underway,” Limaye told Mint. “My term is ending on 16th July 2022. I have done my best to lead the organization in a very difficult time and to stabilize, strengthen and transform NSE. We have focused on control, governance, technology, regulatory effectiveness and It has come a long way in terms of business development. I am grateful to all the stakeholders, regulators and the government for the support extended to me,” he said.

On 4 March, the board of the NSE published an advertisement inviting applications for the head of India’s leading stock exchange.

Limaye was appointed for a five-year term after former CEO Chitra Ramakrishna resigned without completing his term. He is currently in federal custody for seven days due to his alleged role in the so-called co-location scandal.

The recent flurry of regulatory orders and investigative proceedings against the former management of NSE has added to the uncertainty about the public offering of NSE. When the company first went about listing its shares in 2016, the exchange had just 70 shareholders. It has since increased to 2,200. At that time, the exchange value was 40,000 crores and this figure has increased Now 2 trillion.

“Investors are feeling impatient as the recent regulatory orders and enforcement action have pushed the NSE listing towards an uncertain future. They were patient till October 2019, but now they do not understand what the hold-up is. Pending litigation related to the co-location case and disclosure of governance lapses may be a risk factor in the IPO documents, but regulatory approval is pending.”

In April 2019, the Securities and Exchange Board of India (SEBI) had held the NSE and its former management guilty of giving unfair access to certain brokers on access to the co-location facility of the exchange. It had also barred the exchange from listing its shares for six months, which ended in October 2019.

Since then, NSE has written to SEBI at least thrice for permission to initiate the IPO process. However, the regulator has not given the green signal yet.

“SEBI wants to proceed with NSE only after some clarity emerges in the Central Bureau of Investigation (CBI) investigation. The CBI has recently expanded the scope of its investigation and it is still in its initial stage.”

The new head will take over the exchange at a time when it is facing damage to reputation, but is also in a healthy financial position.

The financial indicators of NSE are at par with that of large-cap firms. Its estimated income for the financial year 2022 is 8,500 crore in revenue and 5,800 crore in profit before tax. In the last five years, the market share of NSE has grown so much that it has almost become a monopoly. In the financial year 2017, the market share of NSE for capital markets was 85%. This has increased to 92% by FY 2012. In the derivatives segment it is at 100%.