Delay in IPO of NSE led to Chitra’s exit?

Chitra Ramkrishna’s decision to step down as the MD & CEO of India’s largest bourse NSE seems to have been taken as the culmination of several issues that were seen by investors as pain points for them to exit the bourse.

“There was difference of opinion between her and the board. The board wanted her to focus more on the IPO and I do not think her heart was in the IPO,” said the head of an institutional investor in the NSE requesting anonymity.

The decision regarding listing of the NSE apparently took a long time as there were a few hurdles, including self-listing not being allowed under law. The NSE also wanted to explore the possibility of restructuring the business based on exchange-related and non-exchange-related businesses before listing. However, some of the minority shareholders wanted the IPO quickly.

Ashok Chawla, Chairman, NSE, had said in an interview to BusinessLine in September, “The final decision of the board at this point in time is that the listing process should go ahead on its normal steam, restructuring will be examined, paperwork on that will be done, but the decision on restructuring will be done at a later date. So, the listing process cannot be and will not be held up because of the restructuring. Restructuring may happen in the future, I cannot predict that; it may or may not happen. But, as of now, it is not on the front-burner.”

In fact, a lot of deliberations took place between the shareholders and the company before the NSE board finally approved the listing process last February authorising Chitra Ramkrishna to induct members in its listing committee.

Despite all these issues, the listing committee was formed with the bourse announcing that it would file the draft offer document by early 2017. Meanwhile, rival BSE has already filed its DRHP with SEBI paving the way for its listing on the NSE.

Chitra Ramkrishna had then said, “We are committed to take the listing of the country’s most-trusted bourse to the exchange platform. Understanding of critical issues and a constructive dialogue are important to reach this milestone within the stipulated time. I am sure the Listing Committee will play a pivotal role to chart out this process.”

“As soon as the above objectives are assessed, the listing committee will present its formal report to the Stakeholders Relations Committee (SRC) for its review and onward approval by the board.”

The other issue which could have given rise to difference of opinion was that the bourse had initially announced that it would also consider a foreign listing and would file its draft papers by April 2017, on which Chawla in his interview had said the bourse was not actively looking at a foreign listing.

Finally, the findings of the technical advisory committee of SEBI, which found the NSE apparently providing preferential access of its algorithmic trading platforms to some market participants, was also an issue which cropped up during Chitra’s tenure.

Chawla said, “Well, everything is before SEBI and the regulator has asked the NSE board to get it examined by an independent external agency and take appropriate action within three months. So, that is all that I can say at this stage.”

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