More companies desert Calcutta Stock Exchange

In spite of efforts to revive one of the oldest stock exchanges in the country, the Calcutta Stock Exchange (CSE), companies continue to delist from it.

In the last two months, about 20 companies have de-listed from the exchange, including Dunlop India, NIIT, Allahabad Bank, Triveni Engineering Industries and GIC Housing Finance.

Molly Thambi, managing director and chief executive officer, CSE, said delisting applications were pending for the last five-seven years and the exchange recently started issuing delisting certificates to clear the backlog.

“These were age-old applications, which we have started clearing now. The companies which got de-listed recently had sought permission in 2003-04,” she said.

The restart of trading in Orissa Minerals Development Co (OMDC) shares from October 2009, after nearly 24 years, has been a major boost to the exchange in recent times. The last traded price of the share, according to CSE website, was Rs 21,800, one of the most expensive shares on stock exchanges. OMDC is currently listed only on CSE. Following OMDC, more companies were expected to re-start trading on the exchange.

Close to 2,700 companies are listed on CSE, but only a few are traded actively.

Recently, the exchange chalked out a revival strategy, which includes the launch of a broking arm, CSE Capital Markets, to generate a stable revenue stream.

The subsidiary was expected to start functioning in the second quarter of this financial year, said Thambi.

In 2007, the Bombay Stock Exchange picked up 5 per cent stake in CSE after demutualisation. The agreement proposed setting up a trading platform for stocks listed exclusively on CSE. There are about 10 such stocks, which are also allowed to trade on BSE.

However, CSE members have been seeking exposure to the National Stock Exchange’s derivatives segment. CSE Capital Markets will help them trade in the derivatives segment too. The exchange was also upgrading its C-star platform and trying to bring more brokers to the exchange to generate volumes, said Thambi.