From a nation of savers to a nation of investors: NSE bets on technology, financialisation and market depth

India's capital markets are witnessing a transformative phase as retail participation soars and demat accounts reach record highs. NSE Chairman Srinivas Injeti and MD & CEO Ashishkumar Chauhan reveal the company's strategic shift from merely expanding investor base to deepening financialisation of household savings. The future growth of NSE is expected to stem from a diversified ecosystem encompassing equities, bonds, data, technology, and global connectivity, positioning India as an emerging global financial hub driven by innovation and market depth.

Going beyond merely adding demat accounts, the next milestone is to deepen financialisation by encouraging broader participation in various asset classes and increasing market penetration beyond urban centers. SMEs are also poised to play a significant role in leveraging capital markets for growth. Exchanges must strive to make markets more accessible, transparent, and resilient to foster a nation of investors rather than just savers.

Opportunities for NSE lie in India's burgeoning economy, accelerating financialisation of household savings, and advancements in technology and globalisation, including avenues like GIFT IFSC. However, the biggest risk lies in maintaining investor trust and market integrity, especially as markets become increasingly digital. Technology and cyber risks necessitate constant vigilance, while adapting to evolving regulations and market dynamics without compromising investor protection is another key challenge.

Derivatives revenue, which accounts for 46% of NSE's revenue, should not be perceived as the sole source of income. The company aims to broaden its revenue base through products such as electricity futures, bond-index futures, Electronic Gold Receipts, and expanded market-data and technology offerings. While derivatives will remain crucial for price discovery and risk management, future growth should increasingly emanate from multiple asset classes and technology-driven businesses.

Tightened norms around retail participation in derivatives, primarily driven by investor protection and market quality, have impacted market behavior. While weekly options remain significant, monthly options and futures continue to hold substantial weight. Investors are becoming more sophisticated as technology enhances access to information, and NSE's role is to support this transition through investor education, transparent information, and resilient market infrastructure.

Products, technology, data, and connectivity are intertwined and reinforce each other. Data and technology possess significant long-term potential, as they can scale across markets and geographies without relying solely on trading volumes. New products like Electronic Gold Receipts can enhance transparency and market-based price discovery.

The growing demand for real-time data, analytics, and portfolio-management tools is expected to bolster this segment further. Ultimately, NSE envisions transitioning from a transaction marketplace to a comprehensive financial-market technology and information platform.

The shift from SGX Nifty to GIFT Nifty aimed to bring India-centric price discovery closer to home, creating an international venue within India for global investors to access India-related products through a regulated ecosystem. This move has successfully attracted global liquidity, with India now positioning itself as a credible price setter and financial-market hub, aspiring to become a primary destination for global capital.

Critics often argue that competition among exchanges is limited. However, NSE responds by emphasizing that competition should be measured by investor welfare, including better products, lower friction, stronger innovation, and greater efficiency. NSE's market share reflects the liquidity, scale, and technology that investors have chosen, but it also necessitates continual standard-raising.

The benchmark is increasingly global, and new asset classes, technology investments, and innovations in data and connectivity can further deepen market development. Ultimately, investor-centric competition strengthens the entire financial system.