The process of winding up of Kanpur-based defunct Uttar Pradesh Stock Exchange (UPSE) has now started.
The Exchange, inaugurated on August 27, 1982 by then union finance minister Pranab Mukherjee, eventually lost in the race of technology to its more successful and glamorous cousins viz. Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) in the new millennium.
For the past several years, no trading had taken place on its platform. The companies listed on UPSE were also listed on other exchanges to comply with statutory requirements.
On November 3, UPSE Managing Director B K Nadhani had notified its listed companies either to file for voluntary delisting or opt direct listing with other stock exchange within 30 days.
The formal closure was imminent after UPSE could not meet the stipulation set by Securities and Exchange Board of India (Sebi) for the regional stock exchanges in the country about net worth of Rs 100 crore and turnover of Rs 1,000 crore.
"Similar fate awaits most of the other regional stock exchanges as well, barring probably the Calcutta Stock Exchange," a somber sounding UPSE Brokers' Association president Sushil Kumar Kanodia told Business Standard.
UPSE mentioned that companies failing to comply with its notice would be subjected to action under relevant rules/regulations and Sebi's circular dated May 30, 2012. "The Exchange shall not be responsible for any consequences due to non-compliance on the part of the company," the notice reads.
"Since the exchange has been non-functional, most of our members had already been engaged in broking on other trading platforms," Nadhani informed.
UPSE had been the only stock exchange in Uttar Pradesh and always held a landmark and prestigious position in the industrial town of Kanpur in its days of yore.
About 600 companies were listed on the Exchange till its last days, a trickle down from over 800 firms earlier.
UPSE had fiercely contested the Sebi directive in the court and even tried to reach out to the Member of Parliaments, political parties and regional stock exchanges.
However, nothing worked out for it and finally in June 2014, UPSE board and shareholders approved the decision to shut down its operations.
UPSE would soon float a Voluntary Retirement Scheme (VRS) for its on-roll employees.