At the BT India@100 Summit, National Stock Exchange (NSE) Managing Director and CEO Ashish Kumar Chauhan addressed several crucial aspects of India’s capital markets, delivering strong messages for small investors. His remarks covered the risks of derivatives trading, the status of NSE’s IPO, and the immense potential of India’s markets leading up to 2047.
Chauhan began by highlighting the unique strength of India’s capital markets, especially in fostering trust among small investors from across the country. He cited an example where a woman from Jorhat or Durgapur might invest ₹1,000 in a company based in Salem, Tamil Nadu, without ever visiting it or directly inspecting its business. This, he noted, is possible because India has built a technology-driven, transparent, and governance-oriented capital market tailored for small investors—something rare among developing nations.
India’s capital market journey since NSE’s operations began in November 1994 has been remarkable. At that time, the country’s total market capitalization was around ₹3.6 lakh crore. Today, it has soared to approximately ₹415 lakh crore—an increase of about 130–140 times. This growth has positioned India as the fourth-largest capital market in the world, after the US, China, and Japan. Chauhan stressed that this achievement defies the common economic theory that countries with low per capita income, like India (around $3,000), cannot develop strong capital markets because poorer populations save less and lack trust in distant investments.
Turning to derivatives, Chauhan issued a clear caution: derivatives trading is not suitable for small investors. He explained that derivatives are complex and highly leveraged instruments designed for those who fully understand the associated risks. For retail participants who enter without this understanding, the chances of heavy losses are high. He warned that engaging in derivatives without complete awareness is akin to stepping into a trap, and that such markets should ideally be off-limits for small investors who lack the necessary expertise and financial capacity.
Chauhan also called for exchanges and regulators to develop systems capable of identifying and preventing harmful trading patterns. Referring to the “Jane Street” type of activities that have profited at the expense of retail traders, he suggested that regulators should be able to detect such patterns automatically and cancel harmful trades under proper regulations. While such measures may not fully eliminate losses for inexperienced traders, they can stop exploitative practices and protect the broader investor community.
On the much-discussed NSE IPO, Chauhan provided a concrete update. Before listing, NSE must first obtain a No Objection Certificate (NOC) from the Securities and Exchange Board of India (SEBI). Only after receiving the NOC can the exchange prepare and submit its Draft Red Herring Prospectus (DRHP) to SEBI. Once approved, NSE can then list on an exchange such as BSE. As of now, SEBI has not yet issued the NOC, so the IPO process is still in progress.
Looking at the long-term potential of India’s markets, Chauhan expressed confidence that the country’s economy could reach the $30 trillion mark by 2037. He emphasized that there are vast expansion opportunities ahead for the Indian market, supported by strong governance and technology infrastructure.
Chauhan also reflected on his return to NSE during a challenging period when the exchange’s reputation had suffered and its technology infrastructure required immediate upgrades. Today, he said, NSE has successfully regained investor trust and is well-positioned for the future.
His overall message for small investors was clear: avoid speculative traps like derivatives unless you fully understand the risks, rely on the robust governance and transparency of India’s capital markets, and look ahead to long-term opportunities rather than short-term gains.
Disclaimer:
This article is for informational purposes only and does not constitute investment advice. Stock market investments are subject to market risks, and readers should conduct their own research or consult a qualified financial advisor before making any investment decisions. The views and statements mentioned are based on remarks made by NSE CEO Ashish Kumar Chauhan at the BT India@100 Summit
