Sudhir Joshi, the newly elected president of the Delhi Stock Exchange (DSE), realises the mammoth task before him. He has chalked out a plan to add more `breadth and depth' to the exchange. His first priority is to almost double DSE's market share from the current level of around 3 per cent. He discusses his plans to revive the exchange with Jai Kumar NR and Nitin Mathur. Excerpts:

What will be your focus as the new DSE president?
My primary objective will be to add depth and breadth to the exchange. This will be done through increased reach, i.e., to metro and mini-metros, especially in north India, alliances with other exchanges and launch of new products like trading in dematerialised government, gold-backed securities and mutual funds.

We also plan to reduce the number of inactive brokers by either giving them an exit route or turning them into active players. At present, about 100 DSE brokers, out of a total of 375, are inactive. Also, we will be launching retail depository services and have approached both NSDL and CDSL. The move will make smaller broker members provide services at par with the biggies.

DSE has been expanding the trading network. How far have you been successful?
We are in the process of adding another 120 ISDN lines from MTNL and virtual private network (VPN) from Dishnet with plans to cover at least 200-250 cities, specially in north India within three months. At present, we have 1,500 trading terminals spread over north India. These will be expanded to 2,500 by the end of this fiscal. After the expansion is complete, the brokers will get real-time rates on a network that is reliable and cost-effective. The volumes are expected to touch around two lakh trades per day after the expansion.

Why did you shortlist products like mutual funds, government papers and gold-backed securities?
Unlike bigger exchanges like NSE and BSE, we need to develop our own niche area. Delhi and nearby areas have a large number of retail investors who have retired under the VRS schemes of banks and other PSUs. They have a large sum of money which they would like to invest in relatively risk-free securities yielding better returns. Government securities is one such option which offers about 12 per cent returns at zero risk.

Dematerialised trading in gold is also being introduced as the metal is still considered the second best investment option after housing. Gold consumption in India is still much higher than world averages. Nevertheless, trading in gold-backed securities in demat form will be free from risks of theft and impurity.

Mutual funds are also a safe investment option than direct investment in equity as they provide better spread of risks and professional management. In addition, we already have a very safe product in `vyaj badla', which yields 10 to 25 per cent returns and is compounded on T+1 or T+2 basis.

How do you plan to reach out to the retail segment?
With risk-free high-yield products, we plan to reach out to our customers through investor conferences and the print media. For gold-backed securities, we are trying to contact some Indian banks. Some foreign banks have already shown interest in this product. We are also planning to market all UTI schemes and select private sector funds.

When are these products expected to be launched?
Within the next three months. There are no regulatory hassles as far as gold-backed securities are concerned, as long as we do not have trading in futures. For government securities, we have already held discussions with the Reserve Bank of India. It has specified its areas of concerns, basically about the settlement procedure on which we are currently working.You also talked about alliances with other exchanges.

We are hunting for both domestic and foreign partners. Our common trading platform with the Calcutta Stock Exchange is expected to commence business by March 2001.

I have also appointed committees to explore possibilities of tieup with exchanges in Abu Dhabi (where a large number of NRIs stay), Chicago (for commodity trading) and Australia.