The country's newest bourse United Stock Exchange, currently offering currency futures trading only, is looking to soon enter new segments such as equities and interest rate futures to expand its business and profits.
The move could put USE in direct competition with Bombay Stock Exchange, but its chief said that the bourse would make sure not to rub shoulders with its larger rival BSE, which also happens to be its largest shareholder.
"Yes, it is true that we have to enter more segments of trading, which is in fact a natural business progression," USE Managing Director and CEO T S Narayanasami told PTI.
He, however, added that USE was yet to approach its board with any such plans.
Currently, BSE and NSE are the only two major national stock exchanges providing equity trading, while two others, USE and MCX-SX are only present in currency futures market.
BSE withdrew itself from currency futures in favour of USE, while NSE is present in virtually all the segments.
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The issue of competition in stock exchange arena has become a hot topic of debate and the Competition Commission of India recently slapped a Rs 50 crore penalty on NSE after finding it guilty of abusing its dominant market position.
In its order, which followed a probe conducted by it pursuant to a complaint filed by MCX-SX, the competition watchdog also asked the NSE to immediately stop subsidising its products in currency derivatives market and start imposing a transaction fee.
Welcoming the CCI move, Narayanasami said there has to be a revenue model for any business and it was good that some transaction fees are charged, especially for those entities which have only single-source revenues.
Noting that USE needs to diversify, he said: "We will ensure that there is no conflict of interest with the Bombay Stock Exchange, as and when we decide to enter new segments.
"After all the BSE is our largest shareholder with 15 percent stake and we have no plans to antagonise them," he added.
He also noted that it was "a very delicate issue, since BSE had shut their currency business when they picked up stake in us. We have to respect that decision".
Narayansami's comments come in the midst of rumours that BSE might sell its 15% stake in USE, following which the two would compete in all the market segments.
Narayanasami also scotched rumours about any plans to leave USE and said that there was "no basis for such reports. They are all sheer rumors. I am very much with the exchange and have great plans for it as of now."