Chitra Ramkrishna, chief executive officer of National Stock Exchange of India Ltd., speaks during the interview (Photographer: Michael Nagle/Bloomberg)

Biggest Indian Exchange’s CEO Resigns Just Months Before IPO

(Bloomberg) -- Chitra Ramkrishna has resigned as chief executive officer of the National Stock Exchange of India just months before the exchange plans to go public.

Ramkrishna, 53, quit due to personal reasons, according to a statement from the bourse operator, which didn’t provide further details. Managing Director J. Ravichandran has been appointed interim CEO, it said. A search is underway for the next chief executive.

“Ms. Ramkrishna had tendered her resignation due to personal reasons and expressed her desire to step down with immediate effect,” NSE said in a statement Friday. “The board, while accepting her request, appreciated her sterling contribution to the growth of the organization over the long years that she had been associated with it.”

The NSE appointed bankers including Citigroup Inc. and Morgan Stanley in August, as the nation’s largest exchange prepared to go public early next year. The NSE will file a draft offer document with the market regulator for a domestic listing by January, it said in a statement in June.

“The market won’t take a bearish call on the resignation,” said Chinmay Madgulkar, an analyst at Taurus Asset Management Co. in Mumbai. “NSE is an institution and no person is greater than the institution.”

Ravichandran “has been associated with NSE for long years and brings with him a wealth of experience and full understanding of the functioning of the organization,” NSE said in the statement.

Only Woman

The bourse plans to list so it can give shareholders a chance to exit, Ramkrishna said in an interview in July. In the past two decades she helped grow the NSE into the exchange leader in India, with an 82 percent market share. Last month, she became the first female to be named chairperson of the World Federation of Exchanges.

Ramkrishna took over as CEO in April 2013 after serving as co-managing director. Before joining NSE, she was working at the state-run Industrial Development Bank of India, or IDBI, after earning degrees in commerce and an accountancy in Mumbai, where she was brought up after being born in Chennai. 

In 1992, she and four other technocrats were selected for a team to build the first nationwide exchange. Ramkrishna was the only woman, picked because of her experience at IDBI in the 1980s working on a blueprint for a national regulatory agency that led to SEBI’s creation.

The team was mandated to develop technology to move trading from open-outcry to electronic, untested in India at the time. Going up against a Goliath, the Bombay Stock Exchange, the group worked out of a tiny, leased office in a part of central Mumbai known for its defunct textile mills.

The NSE developed a screen-based trading system that started in 1994. Using a satellite, it displayed stock prices that could be accessed simultaneously at brokerages nationwide. Among other innovations, NSE introduced refundable membership for brokers, replacing BSE’s earlier system of auctioning broker permits that restricted the number of participants and trading volumes. Nearly 60 percent of NSE’s broking membership in the early days came from cities other than Mumbai.

Dominant Position

The changes helped NSE charge well ahead of its older rival and into the dominant position it holds today.

“From the outside, the day to day business at the NSE was managed well and it was functioning smoothly,” U.R. Bhat, a Mumbai-based investor, said by phone. “The exchange managed to hold on the lead over the other exchanges and expanded it well.”

That wasn’t enough for Ramkrishna, who told Bloomberg News last year she was aiming to increase individual participation in her market. Just an estimated 1.5 percent of Indian households directly own equities.

Ramkrishna said she wanted to make stock markets accessible to India’s middle classes using the exchange-traded funds. Under her leadership NSE held public financial awareness programs and continued a marketing push to get banks and brokerages to encourage investors to put their money into ETFs.

“The focus of the new chief executive must be to expand the size of the entire market, and not just the segment that caters to derivative traders,” said Deven Choksey, managing director at K.R. Choksey Shares & Securities Pvt. in Mumbai. “The exchange’s job is not just to run the business for sake of its own balance sheet. It must look to expand the equity cult to all investors.”