NSE fears short-term volume hit due to MDR: Ashish Chauhan

MUMBAI: With the government giving its go-ahead to charge merchant discount rates (MDRs) on merchant transactions above Rs 2,000, the National Stock Exchange (NSE) fears the charges will hit its transaction volume, at least in the short-term.

The IPO-bound exchange, which leads the market volume to the tune of almost 97%, also said the anchor demand for its public issue opening for retail subscription from Thursday has seen stronger-than-expected demand, despite the issue size being revised down to Rs 22,562 crore from Rs 31,800 crore, which would have made it the largest issue on record, but is now behind Hyundai’s Rs 27,870 crore.

"There may be some impact initially on our transaction volumes in the short term due to the MDR charges above Rs 2,000. After some time, I hope it normalises," NSE chief executive Ashishkumar Chauhan said here on Tuesday.

The government has exempted UPI transactions to merchants of up to Rs 2,000 from charges, paving the way for MDR on higher-value transactions.

The IPO issue, entirely an offer-for-sale, comprises the promoter selling 12.64 crore shares, priced at Rs 1,700-1,785.

On the higher-than-expected anchor book demand, Chauhan said, "The demand from anchor investors is unexpectedly great, as the book size has shrunk, leading to higher demand."

“Since we have to allot a specific amount of shares to every group, like local mutual funds, and the issue size has been reduced, the anchor book is pretty large, much more than we thought,” he explained.

The exchange has also said its current order-handling capacity is 15 lakh orders per second and could rise to 5 crore orders per second with technological additions.

NSE currently handles around 2,200 crore orders and 30 crore trades a day, while its investor base stands at 13.2 crore unique investors, Chauhan said.