Will concentrate equally on growth of all segments: BSE Chief

Although profitability is achieved through trading volumes, the most important activity for any exchange is raising funds and BSE is doing that efficiently says CEO and MD Ashish Chauhan. When asked if BSE will focus on commodity, currency exchange, or the GIFT City more than cash and F&O segments, Chauhan said, "BSE will concentrate equally on all segments and wherever it gets market share." BSE is more bullish on bond distribution, mutual fund distribution, IPOs, he said.   Below is the verbatim transcript of Ashish Chauhan’s interview to Varinder Bansal on CNBC-TV18.Q: How can BSE grow its market share in the cash and F&O segment because that is a critical segment for an exchange earnings. It hasn’t happened in the past in the last 5-10 years, but how much are you confident, can that change going ahead or not? A: For me many times all of us think that Olympics has only one race which is 100 meters and we keep on harping on that and we forget that there is badminton, there is wrestling, there is boxing, there is swimming. So stock markets, purpose is not only for trading, stock markets, main purpose is price signaling, assets which are listed in a stock market, actually the prices that happen, they give you sort of price signals. Second is raising of funds which is actually the most important activity for any exchange, especially for the country although the profitability maybe due to trading volumes, but if you raise funds, you are very relevant. Today BSE has close to 5,000-5,500 stocks and that shows you that largest amount of funds raised, even over last few years, have been by BSE only. Although we may not trade as much, we raise more funds, we provide more investment activity. So, if you see mutual fund distribution, we are the largest mutual fund distribution platform, if you see bond distribution, last seven months, we have raised Rs 1, 35,000 crore of corporate bonds, IPOs we raise more IPOs. So, for me, it is important to understand that -- and the revenue frameworks of each business, of each exchange may be different. So, you may be impressed by some exchanges trading volumes and that is why they get trading revenues but then they are more volatile also. Q: Am I right to understand that going ahead BSE will not try to concentrate more on the cash and F&O but will concentrate more on other segments of revenues which is commodity, currency exchange, or the GIFT City what you are planning?A: BSE will concentrate equally on all segments and wherever it gets market share. However, its focus has always been to get funds for India. We didn’t focus too much on speculative activities, it is more on investments but it should also try to get something on speculative. So, what has happened is, over last three years, 2013 BSE was zero percent in currencies, today it is around 39 percent. Q: Aren’t those segments small when it is compared to the transactions in terms of cash and F&O segment? A: Why not, but they are growing. So, if you were standing in year 2000, and you were talking to me like this, would you have ever thought that derivatives will be so much larger? The newer segments, they grow up slowly, it is like a child. While it has grown up, person won’t grow so much. So, when you look at it now, it is actually the past. When you look at future, then you can realise how many things actually are possible. Q: Which are the segments where you stand hugely bullish on, whether the international exchange, the Gift City, commodities, currencies, the debt market instruments, mutual funds, where do you see the maximum revenue generation will happen for BSE going ahead? A: For us, we basically worry more about how do we become relevant to the society, how do we remain relevant to the society and there investments is a large sort of framework; that is where we are more bullish on say IPOs, we are more bullish on say bond distribution, mutual fund distribution, not only for our sake, of course we have to also generate adequate profits, but largely because it helps society.For full interview, watch accompanying videos...