Chitra Ramkrishna quits as NSE chief

Board sets up selection committee; Ravichandran appointed interim CEO

Chitra Ramkrishna, managing director (MD) and chief executive of the National Stock Exchange of India (NSE) has stepped down from her post, even as the country’s largest bourse is set to go public.

The NSE board met on Friday and accepted her resignation, the exchange said in a note. The note added that Ramkrishna had tendered her resignation owing to personal reasons and expressed her desire to step down with immediate effect. Her tenure was supposed to end in March 2018.

The board has set up a selection committee to find a replacement for Ramkrishna and has appointed group president J Ravichandran as interim chief executive officer (CEO).

Chitra Ramkrishna’s NSE journey

1992: NSE set up with the help of five technocrats, including Chitra Ramkrishna

September 2009: Appointed joint managing director

April 2013: Elevated to the post of managing director-chief executive officer (MD-CEO)

December 2016: Steps down as MD-CEO

Ramkrishna's abrupt resignation ahead of the expected roadshows in early next year surprised many and led to speculations that she had differences with the board on key issues of listing of the exchange and a Sebi-monitored investigation on alleged irregularities in its co-location platform. However, sources in the know said she had been ailing for some time.    

A chartered accountant by training, Ramkrishna began her career with IDBI in 1983. She was one of the five people hand-picked by legendary S S Nadkarni, then chairman of IDBI, to set up NSE in 1992. She was appointed as the joint managing director of the exchange in September 2009 and was elevated to the post of MD & CEO in April 2013.

Ramkrishna was the second-highest paid executive in the financial services industry, second only to Aditya Puri, MD of HDFC Bank, who took home Rs 9.7 crore in FY16. Her salary was almost thrice that of Ashishkumar Chauhan, who heads rival Bombay Stock Exchange, who earned Rs 3.3 crore.

Ramkrishna was the third woman to head an exchange in the Asia-Pacific region after Sri Lanka’s Colombo Stock Exchange and China’s Shenzhen Stock Exchange. Last month, she was appointed the chairperson of the Board of World Federation of Exchanges, a global industry association for exchanges and clearing houses.

Financial snapshot (in Rs crore)
	NSE		BSE
	Net sales	PAT	Net sales	PAT
FY13	1,462.57	704.89	509.55	108.57
FY14	1,595.09	877.61	485.06	135.19
FY15	1,927.42	965.53	583.71	155.53
FY16	2,222.06	1,026.48	616.19	96.74
NSE data prior to FY15 are standalone; PAT: Profit after tax; Source: Capitaline; Compiled by BS Research Bureau

With Ramkrishna at the helm, NSE’s daily average turnover, including both cash and derivatives, doubled to Rs 3.5 lakh crore, from Rs 1.6 lakh crore levels in the past three-and-a-half years. The exchange posted a consolidated net profit of Rs 1,026 crore, against revenues of Rs 2,222 crore in FY16, with profits 10 times higher than rival BSE. NSE also has 80 per cent market share and enjoys a virtual monopoly in the high-volume derivatives space.

However, the exchange was embroiled in a few controversies during Ramkrishna’s tenure, which included allegations of giving unfair access to data and trading systems to select traders. In 2015, a Singapore-based whistle-blower alleged that a Delhi-based member on the NSE was able to remain ahead of others by linking to servers and getting access to least crowded servers.

Earlier this year, a technical advisory committee appointed by the Securities and Exchange Board of India had found some evidence that the NSE was favouring a few traders over others. Some shareholders also accused Ramkrishna of delaying the exchange’s public share sale.

On June 23, the exchange’s board of directors finally gave their nod to list in India and abroad. The exchange had set a deadline of January 2017 for filing a draft prospectus for domestic listing and another by April for listing abroad. Sources said that the exchange was on track for a domestic filing by January. NSE has appointed Citigroup Global Markets, JM Financial Institutional Securities, Kotak Mahindra Capital and Morgan Stanley India as joint global coordinators to manage its initial public offering (IPO), and Cyril Amarchand Mangaldas as legal advisor for the process.

The exchange has reportedly informed investment bankers and the legal team, who are readying the offer document, of Ramkrishna’s resignation.

Ramkrishna’s resignation is unlikely to have a large impact on the IPO, said a shareholder, asking not to be identified.