BackRajesh Gopinathan joins NSE board
Gopinathan's appointment comes at a time when the bourse is looking to shift its data centre from its existing premises with colocation becoming the dominant mode of trading after the pandemic.
PremiumMumbai: Rajesh Gopinathan, former MD & CEO, Tata Consultancy Services and professor IIT Bombay, has joined the board of the National Stock Exchange (NSE), making him the second former head of a technology company to be appointed after Veneet Nayar, former vice chairman & CEO of HCL Technologies, joined the NSE board in September 2021 as non-independent director.
Gopinathan's appointment comes at a time when the bourse is looking to shift its data centre from its existing premises with colocation becoming the dominant mode of trading after the pandemic, due to a surge in derivatives and cash volumes.
"His over 25 years of experience in the global technology industry, a part of which was spent heading one of the world's largest tech services firms (TCS), will come in handy for the exchange, whose top priorities include shifting its data centre within a year to a year-and-a-half," said a person on condition of anonymity.
Gopinathan has joined as a public interest director with effect from 23 April for three years. NSE shareholders approved the reappointment of Nayar at its 31st annual general meeting in August last year, which is pending Securities and Exchange Board of India (Sebi) approval, as per the exchange's corporate governance report for the fourth quarter of FY24 released last month. Nayar was appointed to the NSE board on 20 September 2021 after Sebi's approval.
Data centre shift
NSE proposes to shift its data centre to a new place “sometime next year", NSE's Group CFO Yatrik Vin told investors at the earnings call on 6 May.
Ashishkumar Chauhan, MD & CEO of the bourse, added that the exchange was increasing capacity within the building (Bandra Kurla Complex in Mumbai).
"... we are increasing capacity within our current building. So there is going to be enough racks available for all the future growth also going forward...even within this building till the time we shift to the new data centre," Chauhan said without specifying capacity details.
Colocation dominance
The shift to a new data centre follows colocation becoming the dominant mode of trading after the pandemic (from FY21) across the cash and derivatives segments, shows NSE data.
Colocation (colo) involves high-frequency traders placing their servers within the exchange premises on racks for a fee, which usually runs into a few lakhs depending upon the size of the rack, whether quarter, half or full, said the person mentioned earlier.
"This enables those located in the data centre to get market data feeds split seconds before those whose servers are further away," the person said. "The algos used along with the colo servers initiate trades rapidly to benefit from small price movements."
On NSE's cash segment, colocation as a mode of trading stood at 34.3% of gross turnover in FY24, up from 34.1% in FY23, NSE data shows. Mobile phone routing was the next preferred mode at 19.5% down from 19.7% in FY23, followed by non-algo-based trade at 18.3% versus 18.6%. Algo trades accounted for 12.8% in FY24 down from 14.6% a year ago. Colo-based turnover in the cash segment stood at an all-time high of 34.8% in FY22.
In the equities derivatives segment colocation accounted for 61.6% of gross turnover in FY24, up 241 basis points from the preceding fiscal, exchange data showed. Mobile-based trading was second at 17.4%, up 20 bps from FY23.
Cash market turnover on NSE jumped 51% year on year to ₹201 trillion in FY24 while derivatives turnover surged 109% year-on-year (y-o-y) to ₹79,928 trillion over the same period.
Incidentally, the bourse hasn't yet appointed a chairman after the five-year term of Girish Chandra Chaturvedi, a former bureaucrat during the United Progressive Alliance (UPA-2) regime, ended in November last year.
Sebi-related regulations mandate the appointment of a chairperson from among the public interest directors (PIDs) with prior approval of Sebi. Currently, PIDs include Gopinathan (professor, IIT Bombay), Abhilasha Kumari (former chief justice of Manipur HC), S. Ravindran ( former Sebi ED), Mamata Biswal (professor of law & ICSSR senior research fellow, GNLU) and S. Sudarshan (professor, IIT Bombay).
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