Rejecting a crown of thorns: Meet Vikram Limaye, MD & CEO of NSE

On March 4, the National Stock Exchange (NSE) put out ads in leading newspapers inviting applications for the post of managing director and chief executive officer (MD & CEO).

The next day, Vikram Limaye, the current MD & CEO, held one-on-one meetings on the top floor of Bandra’s Taj Land’s End with leading publications detailing the “transformational” changes the exchange has seen under him.

With Chief Regulatory Officer Priya Subbaraman and Chief Technology Officer Shiv Bhasin by his side, Limaye made an hour-long presentation on how the exchange transformed its value chain from connectivity to trading to clearing, settlement and surveillance.

The 55-year-old, who completes his first term in four months, emphasised that path-breaking changes were made during a period of uncertainty caused by the alleged misdemeanours of his predecessor Chitra Ramkrishna and allegations of wrongdoing at NSE’s colocation facility.

It was hard not to conclude that this was Limaye’s pitch for another term as MD & CEO. And who wouldn’t covet the top job at one of the world’s largest stock exchanges and India’s 57th most-profitable firm? Yet, a couple of days later he told the NSE board that he was not interested in a second term, a statement that’s raised much speculation.

But there are reasons the job may not be as sought-after as people think. For one, Limaye would have been the first high-profile head of a market infrastructure institut­ion to go through the new appointment pro­cess laid down by the Securities and Ex­change Board of India (Sebi) in 2017 following the Ramkrishna scandal. Under the new rules, the incumbent has to reapply, demo­nstrate his/her performance and obtain a go-ahead from the market regulator.

Limaye joined NSE in July 2017 after a long stint at IDFC, an institution set up to boost infrastructure development by channelling private sector investments. A chartered accountant, he joined IDFC as executive director in 2005 and led the newly restructured holding company following the demerger of IDFC Bank. At IDFC he gained strong expertise across the financial value chain. That complemented his Wall Street experience, working eight years in the New York office of Credit Suisse First Boston after an MBA from Wharton.

Critically, the IDFC job involved const­ant dialogue with the government, regulat­ors and many stakeholders — an attribute that came in handy during the selection process for NSE’s MD & CEO in 2017. Back then, the exchange was looking for someone to steady the ship and deal circumsp­e­c­tly with Sebi, finance minister and shareh­o­lders, many of whom were peeved by the exchange’s opaqueness under Ramkrishna.

Although NSE is a private organisation, given its stature it comes under strong oversight from Sebi, the government and other stakeholders. So even as impressive a track record as Limaye’s wouldn’t have guaranteed him a second term given the complexities involved. “He had a choice between signing off on a high and going through the awkwardness of not getting an extension. He sensibly has chosen the former,” said an industry veteran requesting anonymity. But even as he opted out of the selection process, Limaye made sure his performance was acknowledged.

NSE’s revenues have grown at a compo­unded annual growth rate (CAGR) of 26 per cent to Rs 8,500 crore between FY17 and FY22, while net profit has grown at 29 per cent CAGR to Rs 4,400 crore. In the five years ended FY17, revenues and profit grew at a CAGR of eight and six per cent, respectively. The exchange also saw market share grow in the equities cash segment from 85 to 92 per cent and maintained its monopoly in the derivatives segment.

Some have argued that NSE was already on a strong footing and Limaye didn’t have to do much to maintain pole position. And it is not that Limaye didn’t see setbacks. In February 2021, NSE suffered an outage that halted trading for over four hours and forc­ed the exchange to extend closing time from 3:30 to 5 pm. Given the uproar caused by the incident, the finance minister had to direct Sebi to investigate. The exchange has blamed one of its vendors for the outage.

For Limaye, the real crowning glory wo­u­ld have been if he had deepened the corpo­rate bond market or made progress at NSE IFSC, possibly by completing the proposed tie-up with the Singapore Exchange, which has been in the works since 2020, and, more importantly, pushing ahead with the IPO.

To be sure, all of this wasn’t in his cont­rol. For instance, NSE’s IPO has been stuck since 2016 owing to legacy regulatory issues. Limaye wrote to Sebi last year seeking its no-objection as the exchange had completed the six-month ban imposed in 2019 for lapses at its colo facility, including a Rs 1,000-crore penalty. The regulator has not yet accepted the demand, Limaye said, almost resigned to the fact that IPO glory remains a pipe dream.