Investing In Innovation: The Future Of Indian Markets With Rishi Kohli

You've been in the Indian market a long time.

What do you see changing in the next maybe five, 10 years? What do you think is, where do you think the big shifts are going to be?

So I think, I mean, a couple of smaller things and a couple of larger things.

Smaller to begin with is the stock lending borrowing mechanism in India, right? So that is still very, very tiny.

And it's never taken off largely because obviously we've always had a very liquid single stock futures market, right? So for example, since I grew up along with the markets in my career, so if there's a very liquid single stock futures market and I want to go and short, say, Reliance or Infosys, right?

well-known names globally, so I'm picking those examples.

Then I would just go and do it in the futures market because it's three to four times liquid as more liquid than the underlying cash market for most of these stocks.

And the operationally, you know, it is much, much easier, right? So I would just go and do that.

Therefore, I would never feel the need to go to the SLVM market.

And that's the difference from many global markets like the US, for example, where you don't have a single stock futures market.

And therefore, all the volumes and action is on the SLBM sort of market.

So that's why it's not really taken off.

But having said that, you know, with the focus that SEBI and the government and exchanges have to deepen the cash market, I think, you know, one way to do that is through the, you know, strengthening the SLBM stock lending borrowing mechanism thing.

And of course, there are certain things in that operational process that are not similar to what people are used to globally.

So, you know, if some of those operational rules can be improved as per global standards, then I think there'll be a lot more global firms also who will participate in that, which would make it much more liquid and which would have an indirect impact of deepening the cash market as well.

And deepening the cash market is a clear objective from regulators' side as well.

So I think that should be interesting for the regulator for the health of the Indian markets as well.

And then, of course, you know, derivative markets, obviously, in India have taken off hugely.

You know, obviously, data from regulators and government shows that a lot of retail loses money.

So they've been trying to clamp down a little bit on that over the last one and a half years.

I think recently the comments that have come from the regulators and the chairman are that they understand that some more measures may be required, may not be required, but they look at the data very closely and then decide going forward.

So I think that's the right approach now going forward, whatever may have happened.

Some pampering of it was required, but yeah, I do think there were easier ways to do it.

But between regulators and exchanges, I think they have been talking about the simpler ways of tackling that issue, which I think could be very healthy in the long run.

And apart from that, My personal view is that you should let the market forces sort of play out because that's when the balancing factor plays out in the market.