NSE Not Averse To A Merger If It Makes Sense, Says Limaye
India’s largest stock exchange may also explore merger with Multi-Commodity Exchange Ltd.
The National Stock Exchange of India Ltd. is open to strategic mergers and acquisitions, according to Managing Director and Chief Executive Officer Vikram Limaye, who didn’t rule out the possibility of combining with the Multi-Commodity Exchange Ltd.
“It’s not about denying anything,” the head of India’s largest bourse told BloombergQuint in an interview. “We aren’t averse to inorganic opportunities if it makes strategic sense—be it domestic or international.”
The NSE is in talks to merge with India’s biggest commodity exchange, the Economic Times had reported in July citing unnamed people aware of the matter. That comes as the market regulator allowed unified exchanges for both stocks and commodities starting Oct. 1. The MCX, however, had denied any such talks.
“MCX is a listed entity, they’ve already filed a statement relating to the status of this matter (the merger),” Limaye said on the sidelines of the NSE’s silver jubilee celebrations in Delhi today. “As a listed entity, they’d appropriately make disclosures.”
We are not averse to looking at inorganic opportunities, we believe if we want to grow strategically. Then [if] inorganic opportunities makes sense, we will certainly explore it.Vikram Limaye, Managing Director and Chief Executive Officer, NSE
Foray Into Commodities
The NSE, Limaye said, is in the process of foraying into commodities from Oct. 1, when it becomes a universal exchange, offering other classes of products, including agri- and non-agri commodities. “Our plan is to launch non-agri contracts in bullion, metals and energy… over time, we’ll get into other products and other areas.”
Extended Trading
The exchange awaits a final nod from the Securities and Exchange Board of India on extending trading hours in the derivatives segment, Limaye said. The NSE had asked its clients to be ready to handle a second trading session between 5 p.m. and 11:55 p.m. in equity derivatives.
“We received feedback from market players, but the exchange is determined to explore the opportunity,” Limaye said. “Obviously, there’s been feedback from market participants, you'll get different views,” he said, adding “we have to see how it evolves, whether volumes pick up or not.”
Implications on brokers, market participants and investors need to be studied, he said.
Co-Location Issue
The exchange is in discussions with SEBI to bring a closure to the co-location issue. The market regulator issued a revised show-cause notice to the NSE, its executives and brokers.
The probe stems from allegations that the exchange had given a few high-frequency traders preference, helping them gain faster access to price feeds and execute trades swiftly.
Limaye confirmed having received the notice. “Investigations are over and we’ve restarted conversations with the SEBI for a resolution framework.”