As India celebrates the Diwali weekend with a bundle of festivities, the domestic equity markets yesterday lost over half a percent in just an hour trade with much heavier volumes than usual. Indian stock markets opened in a special Muhurat Trading session on Thursday to mark the auspicious occasion of Diwali, beginning of Samvat 2074. In an interview to ET Now, BSE CEO Ashishkumar Chauhan said that the exchange’s perspective has always been higher on investment side than on speculation.
Bombay Stock Exchange which is the oldest Asian stock exchange is the first stock exchange in India to come up with an IPO (initial public offering). Despite being a 142-year-old brand and a veteran in the stock market business, the exchange lags behind the newer market player — National Stock Exchange — in terms of turnover. The daily average turnover of NSE is more than Rs 28,000 crore (approx) with about 1,800 listed companies while BSE’s figure stood at just Rs 3,400 crore which has about 2,584 actively traded companies out of 4,020 companies available for trade.
Trading is not the only job of the stock exchanges, said Ashishkumar Chauhan. The main job is to raise funds for the economy, and that’s what BSE is focussing on. BSE is the market leader in mutual fund distribution by miles, he said. Similarly for bonds — last year exchange distributed $35 billion of bonds. The perspective of exchange has always been investments more than speculation. Also, it has slowly shifted into areas very different — not trading. The focus of exchange will continue to be on distribution, investments, and getting more and more investors into the stock markets, Ashishkumar Chauhan added.
Mutual Fund growth
Currently, the number of issues filed with SEBI (Securities and Exchange Board of India), is much larger than the last year. Ashishkumar Chauhan further said that IPO pipeline is great with rising mutual fund inflows through BSE, which is 15%-20% of total mutual fund inflows. The more important thing is to do what is correct, and profits will follow, Chauhan said.
The exchange is more bothered about regulation and compliances with also getting into other areas. But profits also depend on many listings, IPOs, even secondary market trading. Currently, the indication is that there are going to be many more IPOs, said Ashishkumar Chauhan. The exchange is finalising plans for the distribution of insurance and has a fundamental belief that trading volumes may not grow as much as it has done in the last decade. The exchange has 40-50 companies in SME IPO pipeline which are likely to list in next 3-6 months, Chauhan added.