With the economic growth slowing, the government's target to reach the $5 trillion-mark by 2024 looks ambitious. While the target is achievable, Ashishkumar Chauhan, MD & CEO, BSE, says the capital market will hit the $5trillion-mark before India becomes a $5 trillion economy. "Both the targets are achievable by 2024," he says.
At Association of National Exchanges Members of India (ANMI)'s 11th international convention in New Delhi, Chauhan also talked about zero brokerage model and how the industry is moving into that direction. "Brokerages need to accept that flat fee broking model is here to stay. They should start looking for different sources of revenues such as mutual fund and insurance distribution. The margins have collapsed close to zero," Chauhan says.
Notably, BSE's mutual fund platform Star Mutual Fund has been performing quite well. On February 7, the stock exchange also launched the beta version of its insurance distribution platform in association with global fintech player Ebix. The BSE-Ebix Insurance Broking has already partnered with a couple of life insurance and general insurance companies, Chauhan told Business Today.
Talking about the growth of the primary market and start-ups' participation in IPOs, the BSE Chief says that the stock exchange has been raising more funds for the corporate sector than the entire banking system put together. "We only focus on big companies raising billions, but what about increasing number of smaller companies raising millions?" he says.
Earlier in the day, Anurag Thakur, Minister of State for Finance, recognised the need for the development of the capital market. "We need to ensure that the public faith is not eroded in the stock market due to scams and frauds," he says.
Thakur added that the government has been taking steps to deregulate the market and ease the compliance burden for investors.