Markets

NSE open to global tie-ups with exchanges for SME platform: CEO

R Yegya Narayanan Coimbatore | Updated on January 24, 2018

Vying tie-ups Chitra Ramkrishna, MD & CEO, NSE, speaking at theconference ‘Enigma of Funding’ in Coimbatore. K ANANTHAN

While the National Stock Exchange (NSE) is open to the idea of entering into alliances with other smaller exchanges in the world for its SME exchange Emerge, listing of a large number of top notch companies on it would draw the attention of a lot of international exchanges, according to Chitra Ramkrishna, Managing Director and CEO of NSE.

She said NSE has been able to create 'Small and Medium Investment Bankers'' in different regions who understood the local needs and could handhold the SMEs in meeting their funding requirements.

Speaking at a meeting organised by the Young Indians (YI) and Entrepreneurs' Organisation (EO) on 'Enigma of Funding' here on Saturday, she said there were a plethora of options in the country now to raise capital from the public or for providing an exit route to any large investor already invested in these companies.

The institutional transaction platform of NSE offered the exit window to the investors and for the entry of new investors keen to pick up their stake.

She visualised a range of financial products that would be required by the SMEs to raise resources- equity, debt etc and NSE had already broadened the options available by offering currency trading.

The NSE CEO pointed out that SMEs that were either export or import-oriented did not have the kind of access to get 'superior rates for hedging' their exposures.

But now they are on par with large industries with the currency platform on NSE reaching out to the SMEs and educating them on how the exchange platform extended to them a 'democratic access to a good forex rate' and how it helped them to hedge their risks. At present, nearly 700-800 SMEs used foreign currency platform as a medium to hedge their exposures.

Chitra Ramkrishna said the initiatives of NSE showed how it wanted to build an 'eco system around our offerings' to the SMEs. While equity was at one end of the spectrum of offerings, NSE wanted to broaden its offerings to include debt, currency trading that was already available and possibly interest rate hedging exposures through interest rate futures products.

Though these were already available on the OTC platform, their accessibility and the rates at which these were available were dependent on the bilateral relationship that the SMEs had with their bankers.

She said usually, an anonymous platform like the exchange 'democratised that access' by providing a very thin spread irrespective of the trading volume.

The exchange believed that the 'comprehensive engagement with the SMEs' would help bring down the financing costs for the latter.

She assured the SMEs of Coimbatore full support to make them understand the process and decide what was best for them.

The NSE CEO said one of the big drawbacks faced while reaching out to the SMEs was that there were not enough investment bankers/merchant bankers who could assist the SME clusters.

In some of the clusters like Mumbai, Delhi etc, NSE was able to create `Small and Medium Investment Bankers' whose niche area was these kinds of enterprises, who were locals, who understood the enterprises of the region, their valuation and the investors of the region and have the patience to take the SMEs through this process.

Huge opportunities were opening up on the economy side and on the funding side and urged the SMEs to grab the chance by making the partnership work for all.

Responding to a query on whether the SMEs would enabled to access international finance through the exchange, Chitra Ramkrishna it was the wish of everyone that "other markets should seek out our enterprises''.

When there were about 50 odd top notch companies listed on the 'Emerge' platform of the NSE, we would see a lot of markets interested in associating with them. She said NSE was open to such alliances.





Published on January 11, 2015

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