In the news | Vikram Limaye: Undone by skeletons of the past

Vikram Limaye had been battling crises even before he took over as the head of National Stock Exchange of India (NSE), the country’s largest bourse.

In the news | Vikram Limaye: Undone by skeletons of the past
Vikram Limaye was also the first outsider to head the exchange.

By Ashley Coutinho

As someone credited with helping infrastructure institution IDFC wade through troubled waters, Vikram Limaye had been battling crises even before he took over as the head of National Stock Exchange of India (NSE), the country’s largest bourse.

When he joined the beleaguered bourse in July 2017, the exchange was in the midst of a co-location probe and was facing the ire of regulatory authorities and disgruntled shareholders. He was also the first outsider to head the exchange.

A few months into his stint, the exchange was engaged in a clash with the Singapore Exchange (SGX) as the latter tried to launch its own derivative contracts that would replace Nifty50 contracts, which had been trading in the city-state for years. Indian exchanges, including the BSE and Metropolitan Stock Exchange, cancelled licensing agreements allowing derivatives contracts to be traded overseas and the NSE later sued the SGX in a Mumbai court.

The setback did not deter Limaye from going out of his way to mend relationships with various stakeholders. “Limaye’s appointment marked a 180-degree turn in the exchange’s engagement with NSE shareholders. Limaye was responsive to our needs. There were times when we would simply text or WhatsApp him and he would take time out of his busy schedule to hear us out,” said one shareholder, on condition of anonymity.

A senior official with the exchange characterises Limaye’s leadership style as “inclusive and consultative”. “He has given utmost importance to governance and integrity and has been transparent in his dealings with the board. He has also worked tirelessly behind the scenes with the regulator on a number of key projects,” the person said.

Under his watch, the exchange’s revenues have more than tripled to Rs 9,499 crore at the end of FY22 from Rs 2,681 crore in FY17. In the same period, net profit jumped 326% to Rs 5,198 crore. NSE has continued its monopoly in the derivatives segment with a near 100% share and improved its cash market share to 93% at the end of FY22. It has 70% share in Currency Futures and 95% in Currency Options for fiscal 2022, based on premium value.

With a fresh multi-agency probe against his predecessor, however, the ghosts of the past have come back to haunt the exchange. Despite repeated attempts, Limaye’s goal of taking the exchange public has come to naught. Several marquee investors such as Citigroup, Goldman Sachs, Norwest Venture Partners and Elevation Partners have either exited the bourse or trimmed their stakes in the past few years amid the uncertainty in the IPO timeline.

“Limaye got more than what he bargained for and did not realise that the rot at the exchange ran deep. It is not easy to be constantly be under the radar of regulators and investigating agencies for past wrongdoings and keep your morale and that of your team high,” said a former regulatory official.

The exchange has also seen several trading glitches in the past few years, one of which resulted in a trading halt of four hours on February 24 last year and prompted the regulator to issue show cause notices to the exchange and its employees.

“I have done my best to lead the organisation in a very difficult period and to stabilise, strengthen and transform NSE,” Limaye said in a message to the media on the day of his departure. “We have come a long way in the last five years in terms of strengthening governance, controls, technology, regulatory effectiveness, risk management, market growth and culture.”

Limaye can take heart from the fact that the conflict between NSE and SGX seems to have been laid to rest for now. Both exchanges have agreed to set up a GIFT Connect at IFSC which could make Nifty contracts available to overseas investors for trading.

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