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We need to have a healthy ratio of trading to deliveries: Ashishkumar Chauhan, BSE

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India has become very large in terms of pure derivatives trading but that is a cause for rejoicing as well as concern, Ashishkumar Chauhan, MD & CEO, BSE, tells ET Now.

Edited excerpts:

Markets have been in touching distance of a record high, at least the benchmark indexes. Tell us about the kind of participation that you are seeing on delivery side versus what is happening in the F&O markets.

More and more IPOs are coming and that is a very heartening thing. Of course, there has been consistent deliveries and a lot of trading as well. India has now become very large in terms of pure derivatives trading and that is a cause for rejoicing as well as concern because we need to have a healthy ratio of trading to deliveries. That is where India has run ahead of the rest of the world. Somewhere down the line, we will have also be very cautious on trading vis-à-vis actual deliveries.

What is the traction you are seeing from fee of new listings versus income from market services? What is the IPO radar looking like this year as compared to last year?

This year, the market has just started. Last year also, most of the IPOs were in the second half. We believe if the market continues to remain buoyant, then the second half will look good for the IPOs. In terms of the corporate services, BSE is doing well and hopefully this year will be as good as last year. Last year was a particularly good year for IPOs as well as corporate services and we believe this year one more source of revenue that is in mutual funds has started. Overall, we think this year will probably be as good as last year if the market continues to remain buoyant.

What is the growth you are seeing across your product platforms? Also could you give us an update on how market share is panning out at this moment?

Basically on the absolute terms, this year started a little slow because the markets had gone down a little around March-April and that was reflected in our volumes also. Slowly markets have started coming up and we have seen an uptick in volumes on a daily basis as well as uptick in the number of transactions happening in mutual fund industry overall and specifically in BSE StAR MF platform.

The markets have started doing well and we think if this trend continues going forward, our volumes may continue to grow.

What is the plan on new product launches since the universal exchange nod had opened the doors for you?

October onwards, we will be allowed to trade in commodities in addition to what we are currently trading in — currencies, interest rates, equities, equities derivatives and so on. Commodities will be clearly a very large sort of addition to our business line. In addition, we also have a plan to launch insurance distribution through a joint venture with Ebix which is in the similar business. Through a point of sale mechanism with our members, we even plan to start insurance distribution. Overall, we have many things lined up for this year which may yields results in the longer duration.

What are your plans for investments in GIFT City over FY19-20? Any contribution expected in the coming years?

GIFT City is going to be an onshore-offshore model. Like Hong Kong has raised lots of funds for China, GIFT City can raise a lot of funds for Indias development over next 30-40 years. Since it started, the India International Exchange promoted by BSE, has done wonderfully well and last week itself on a single day it traded almost a billion dollar or more. That tells you how successful it is because in almost a years time no exchange in the world did that kind of business.

That in itself is an achievement but it is early days yet, Many clarifications and regulatory clearances are still required. Once more participants join in, including FPIs and EFIs from abroad, and they start trading, the GIFT City framework might actually become more robust and multiple times trading volumes might be seen in terms of revenues. It is a separate company but it is currently 100% owned by BSE. That would add significantly to BSEs overall trading volume as well as the revenue modelas once it starts moving forward.

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