Industry-specific risks in Exchange Industry in India
Source – ZebraResearch
Source – ZebraResearch
Source – ZebraResearch
Source – ZebraResearch
Source – ZebraResearch
Source – ZebraResearch
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Industry Specific Risks for Indian AMC Industry
Major Risks for the Industry are-
1. Disruptive Tools to invest in the market
2. Consolidation of Demand via platforms
3. Operational and Performance Risks
4. Regulatory Risks.
Growth Factors of Exchange Industry in India
Factors that indicate a healthy growth in the Exchange industry are
1. Increase in number of listed companies
2. Shift from physical assets to financial assets (eg. mutual funds)
3. Increase retail participation
4. Govt approval for EPFO to invest in equity market
5. Growth of data related business
6. Development of corporate bond market
7. Development of International Exchange
Variables for success in Exchange Industry in India
Stock Exchange
•Number of listed companies, ETF/Closed ended MF (leads to rise in one time & Annual subscription fee)
•Increase in Market capitalization
•Increase in Investors/Traders, brokers, intermediators & Data vendors
•Increase in velocity (turnover/free-float)
•Network Benefit (Liquidity within exchange)
Commodity Exchange
•Increase in products introduced
•Increase in market participants
•Volatility in prices of commodity
•Increase in volume/turnover by existing and new players
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Value Chain of Exchange Industry in India
Major Activities to be performed while operating an exchange business are as follows:
1. Manage Operators, other participants & shareholders
2. Trade execution, Delivery mechanism, clearing & settlement system
3. Warehousing, receipts & logistics (for commodity exchange)
4. Legal & Regulatory Compliance
5. Information Management & Data analytics
6. IT and systems management
7. Client Relationship management
Competitive life cycle of Exchange Industry in India
Industry is in Stable Growth Stage. This is because of the following characteristics, which are observed in industry –
1. Stable Growth in Sales
2. Stable Profit Margins
3. Rise in Volume & Turnover
4. Stable Increase in No. of companies listed on exchange.
5. Strengthening Broker Channel
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