NSE boss Ashish Kumar Chauhan recalls 4 watershed moments for Indian stock market

In July 1995, Ashish Kumar Chauhan, now MD and CEO at NSE, went to the Tamil Nadu's Coimbatore to set up the first NSE terminal outside of Mumbai. Chauhan says it was hardly six months since his team set up NSE. That, he said, was a defining moment for the domestic market.

"When I placed the order, within seconds the confirmation came. A person, who was the father of owner of a brokerage house could not believe that he could get the prices at which people, who were sitting in Mumbai, could trade. That was a kind of a beginning of revolution," Chauhan said at India Today Conclave Mumbai 2023. The session was moderated by Sourav Majumdar, Editor at Business Today. 

Chauhan said when he set up the technology at NSE, it was all about Mumbai.

"In some ways, Mumbai was the financial capital and suddenly it got democratised in one single swoop.  technology just brought the entire country on a single floor and that was a very large sort of revelation," Chauhan recalled.

Trading in share certificates used to be a tedious task back then. In those days, he said, if one had to convert shares in his/her name, then the person had to send physical shares to register for transfer once a year for the dividend.

Many people start actually printing the certificates at their home, he recalled adding that it made NSE to set up a depository system.

"That is where all the shares today are, which you usually trade, are sitting in like a bank in some account and you are able to move them effortlessly, without sending it to somebody or even worrying about whether the signature will be wrong or the share certificates will be fake and all. That was a another big moment in India's capital markets," Chauhan said.

Chauhan also touched upon rumours of brokers defaulting, and that actually happened, he said.  Chauhan said the MS Shoes episode was last such episode in India's markets.

"I think it happened in 1995 on BSE but the brokerage is to take our their customers used to take large positions and could not settle when the time came to settlement because the trade used to happen for 15 days and then settlements would happen anytime after 30-40 days of that. In the meantime, the risk would go up," he said.

That was when, Chauhan said, it was decided to set up clearing operations, which provide guarantees for settlements.

Chauhan sees the introduction of derivatives in 2000 as the fourth milestone for the domestic stock market. Chauhan said the derivatives market was introduced to keep the spot market away from the speculative trades. moments in India's capital markets history, and interval.

In terms of technology, setting up the satellite telecom network was the key. "If you recall in 1993 or 1994, if you had to get a telephone line at home, it used to take five years. And to keep it running, you had to pay every month to the linesman. And from there, the entire country got on the same platform using satellite. When we used to send satellites upstairs to the sky, but we never used anything out of that."

After that computers came in everyone's life, Chauhan said.  

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