Ashish Kumar Chauhan, the Managing Director and Chief Executive Officer of the National Stock Exchange of India (NSE), has confirmed the exchange's acceptance of the Securities and Exchange Board of India's (SEBI) decisions regarding the closing auction session (CAS). Speaking at a recent press briefing in Delhi, Chauhan affirmed NSE's commitment to implementing these regulatory mandates.
Regulatory Compliance and Market Outlook
Chauhan emphasized that NSE is prepared to work within any framework SEBI ultimately adopts for proposed changes to the cash market. He noted that the exchange's primary focus remains on operationalizing the regulator's directives.
Looking ahead, Chauhan expressed optimism for an improvement in market volumes. He attributed a period of subdued trading activity over the past two to three years to global conflicts, geopolitical shifts, and policy adjustments in the US, which have collectively impacted investor risk appetite and led to sideways market movements. As these global uncertainties begin to ease, he expects a resurgence in transaction activity across various market segments.
UPI MDR and IPO Details
The NSE chief also addressed the Merchant Discount Rate (MDR) imposed on UPI payments for capital market transactions. Set at 0.02% of the transaction value with a cap of Rs 300, this charge is significantly lower than typical commercial rates, aimed at supporting retail participation. Chauhan acknowledged that the MDR on UPI could briefly affect trading volumes routed through this payment channel but anticipates stabilization in the long term. The ultimate impact will depend on whether brokers and other intermediaries absorb these fees or pass them on to investors.
Regarding NSE's much-anticipated Initial Public Offering (IPO), Chauhan clarified that the exchange itself will not receive any fresh capital from the issue. The IPO is structured entirely as an offer for sale (OFS) by existing shareholders, primarily to meet minimum public shareholding requirements. He highlighted NSE's strong profitability, noting that the exchange distributed approximately Rs 8,000 crore in dividends last year, underscoring its robust financial health without the need for IPO proceeds.
The listing aims to provide liquidity for existing shareholders by creating a public market for NSE shares, fostering greater transparency and broadening the shareholder base. The IPO is expected to feature a price band between Rs 1,700 and Rs 1,785 per share, with a face value of Re 1. Retail investors will be able to bid for shares in lots of eight, requiring a minimum investment of Rs 14,280.