According to experts, some immediate challenges for Chauhan at the NSE would be handling multiple corporate governance and legacy issues
All set to return to the NSE after two decades, the BSE's outgoing CEO Ashishkumar Chauhan faces an uphill task of guiding the bourse bogged down by governance lapses, a co-location scam, technical glitches and a phone-tapping probe, according to experts.
Chauhan will also need to steer the long-pending public offer of shares at the National Stock Exchange (NSE), where he was part of the founding team but left it in 2000, for various roles at Reliance Industries group, before returning to the stock exchange arena as deputy CEO of the BSE in 2009 and then as CEO in 2012.
The NSE's public issue had got derailed after the bourse got embroiled in the co-location controversy, where certain brokers were allegedly given unfair access to the exchange data feeds over other members. Chauhan is credited for successfully handling the initial share sale of BSE.
While his name has been approved by the capital markets regulator Sebi (Securities and Exchange Board of India) as NSE's next chief, there is no clarity as yet about his joining date. His present term at the BSE is till November, but he can quit before that and join the much-bigger but younger exchange.
According to experts, some immediate challenges for Chauhan at the NSE would be handling multiple corporate governance and legacy issues.
The exchange is entangled in the co-location case, allegations of illegal phone tapping during the tenure of former NSE chief Chitra Ramkrishna and management of technical glitches, Kamlesh Shah, President of ANMI, said.
"The challenges currently plaguing the NSE are more fundamental and need to be dealt with through structural reforms. Technological stability is one of the important concerns owing to the glitches faced by the exchange in 2021," said Diwahar Nadar, Assistant Professor, Anil Surendar Modi School of Commerce, NMIMS Mumbai.
The Commodity Participants Association of India (CPAI) President Narinder Wadhwa said the issues that NSE is grappling with are strategic in nature.
Other challenges for Chauhan include ensuring volume growth in the cash segment and smooth shifting of SGX Nifty to GIFT City.
"Commodities present a good opportunity and NSE needs an instrument that attracts participants... The gold contracts at BSE got traction but the NSE needs some product that finds interest of investors," Wadhwa said.
According to Nadar, lapses in internal control over the appointment of Group Operating Officer (GOO) and the gauntlet of co-location scams brought the cracks in corporate governance to the limelight.
"The dusting of the stains of the scam and lapses is a crucial task," he added.
Insiders believe Chauhan's experience makes him a 'virtuoso of augmentation', as reflected in beefing up of the technological armoury at the BSE to make the exchange among the fastest in the world.
Chauhan's feat of taking the BSE public makes him the perfect suitor to bell the cat and finally fulfil the long-awaited task of listing NSE, Nadar said.
It's a sort of homecoming for Chauhan, who was one of the founding members of the NSE, where he worked from 1992-2000.
At NSE, he is said to have been instrumental in setting up India's first fully automated screen-based trading system and first commercial satellite communications network, as also in creating several path-breaking frameworks including the Nifty index and NSE certifications in financial markets.
After leaving NSE in 2000, he joined Reliance Industries Group and served in several roles, including as chief information officer of Reliance Infocomm and CEO of the IPL team Mumbai Indians. He also handled additional responsibilities as the Head of Corporate Communications for Reliance Group from 2005–2006.
After an eight-year stint at the Group, Chauhan returned to the stock exchange sphere as deputy CEO of the BSE.
At BSE, Chauhan is credited with reviving its revenues, he helped it become the world's fastest exchange with 6 microseconds response time, introduced mobile stock trading to India, diversified in new areas including currency, commodities and equity derivatives, SME, start-ups, mutual fund and insurance distribution, spot markets and power trading.
Chauhan has been with BSE since 2009 and his term at the exchange is scheduled to end in November.
At the NSE, Vikram Limaye's five-year term as MD and CEO ended on July 16, as he did not seek an extension despite being eligible for reappointment.
"Chauhan with his spotless, non-controversial reputation, affable personality and collaborative approach will navigate NSE through all these challenges.
"He will take NSE to an altogether new orbit of growth, investor experience, dominant products in multiple segments and tech-savvy exchange," Wadhwa said.