Three regional stock exchanges have shown interest to merge with the 75-year old Madras Stock Exchange (MSE), one of the oldest regional stock exchanges in the country. The exchanges that have shown interest include Madhya Pradesh, Pune and Bangalore.
While confirming that few stock exchanges have shown interest to merge with MSE, S Venkateswaran, member, advisory committee, did not disclose the names.
However, a senior source said, of the three stock exchanges that have shown interest, Madhya Pradesh Stock Exchange is also in talks with Bombay Stock Exchange (BSE) and National Stock Exchange (NSE).
The official said, the main reason for other stock exchanges to show interest in merging with MSE is that the exchange has complied with all regulatory norms, besides MSE's trading platform is also ready. To develop the platform it had invested around Rs 2-2.5 crore, which other exchanges may not want to invest in now.
It may be noted that MSE is reviving its trading platform, which was suspended in 2004. V Nagappan, member, advisory committee, MSE said that 99 per cent of the platform is ready and both far and near disaster recovery sites are also ready.
The source added, in the event of merger, MSE will issue shares to the exchanges which are merging with MSE.
At present, companies like Polaris, Orchid, Aban group and Kalpathi Investments, hold 64 per cent share in the exchange, while the balance is held by trading members of the exchange. There are nearly 1,200 companies listed on the MSE. Of these, nearly 600 are not listed with either BSE or NSE.
By reviving the trading platform, investors will get liquidity for their holdings. Similarly, once the approval is received, the exchange may get the status of designated stock exchange, which will help new and existing small companies to raise capital, said Nagappan.
On the recent guidelines by the Securities and Exchange Board of India, which has stipulated that a regional stock exchange should have a networth of Rs 100 crore and an annual turnover of Rs 1,000 crore, he said it can be achieved easily. Last year, the exchange achieved a turnover of Rs 9,479 crore from 60 scrips.