NSE may induct director from Temasek

The National Stock Exchange (NSE) board will discuss the appointment of a new director when it meets on June 11.

Sources said NSE would have a nominee on its board from Temasek Holdings, Singapore’s sovereign fund that recently picked up the five per cent stake held by the New York Stock Exchange (NYSE) in the exchange. The name doing the rounds is Manish Kejriwal, senior managing director of investments, international and India, Temasek, who will replace NYSE Euronext’s Chief Operating Officer Lawrence Leibowitz on the board.

The board will also discuss the distribution of part of the profit of the exchange among its top 250 employees.

The top employees of NSE get a bonus every year from the profit that the exchange generates. The percentage of this profit that has to be distributed among its employees is likely to be discussed. This amount is paid as ex-gratia to the employees, over and above their salaries. Last year, around two per cent of the entire profit of the exchange, around Rs 15 crore, was distributed among the employees, said NSE insiders.

NSE is not only the largest stock exchange, but one of India’s most profitable companies. NSE’s 2009 consolidated-profit after tax stood around Rs 700 crore (on income of Rs 1,024 crore). This makes for a gross profit margin of 67 per cent. Only 23 domestic listed companies have a gross profit margin of over 67. NSE has over 98 per cent share in derivatives and over 70 per cent in the cash equity segment. This year, profits are also expected from the exchange’s currency trading and mutual fund trading segments. The exchange has reserves of over Rs 2,700 crore (excluding the deposits kept by members).

Other items to be discussed by the board include the appointment of NSE’s audit committee head and annual accounts.

The board members of NSE include Vijay L Kelkar, former chairman of the Finance Commission, former presiding officer of the Securities Appellate Tribunal, C Achuthan, State Bank of India’s Anjan Barua, the chairman of Clearing Corporation of India R H Patil, and former Supreme Court judge B N Srikrishna, among others.