The 100-year old Calcutta Stock Exchange (CSE), which started functioning under a Neem tree in 1830, will soon be shifted in a swanky office in Rajarhat, the projected of IT hub of the east.
The exchange will soon have a financial services complex at Rajarhat, 80 per cent of which is planned to be rented.
The exchange had been earlier alloted a 10-acre plot off the Eastern Metropolitan Bypass for a new building but could not build on the plot as it ws engulfed in a financial scandal.
The Bypass plot was due to be auctioned by the Kolkata Municipal Corporation (KMC) and CSE was to get 60 per cent of the proceeds.
"CSE does not need money at this point of time. The exchange has about Rs 130-140 crore in the bank. Also, the board has five acres to sell on the Eastern Metropolitan Bypass. We will soon have a financial services complex at Rajarhat, 80 per cent of which can be rented. Thus fundamentally, CSE has financial viability. However, we can say the exchange needs to be more profitable, through increased income from trading commission and listing," said Udyan Bose, chairman of CSE, in an earlier interview.
Yet, for people like 88-year old Murarilal Chirimar, a regular visitor at the exchange and a veteran broker, Lyons Range was where the heart of the city’s capital market belonged.
Today, CSE stood on 7 Lyons Range, still the seat of prominent brokers of the city, who use the place todiscuss politics, economy and trade stocks on markets like Bombay Stock Exchange (BSE) and National Stock Exchange (NSE), since the eclipse of the CSE trading platform in the scam.
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"People do not come to trade here, they come to chat and pass critical judgments," said Chirimar.
CSE brokers did little trade on its own platform, admitted broking community members in Kolkata, following the payment crisis of 2001.
In spite of the setback, the broking community of the city and its financial market was large and vibrant.
Brokers from Kolkata contributed about five per cent of turnover of BSE and about 12 per cent to theNSE, they claimed.
There were more than 1,000 active brokers operating in the city, all of whom owed their origin to CSE.
As the 100-year exchange started showing signs of distress, many of them started trading on the BSE and NSE.
"Brokers from Kolkata contribute significantly to the turnover of BSE and the NSE. CSE was virtually dead after the events of 2001. The tie-up with BSE was meant to attract more brokers, and all the companies in CSE were to be listed in BSE under a special category," said a broker long associated with CSE.
In 2007, CSE was demutalised, and BSE picked up a five per cent stake in the exchange.
CSE had reached an agreement to share BSE's trading platform to enable its members to trade in cash and F&O segments.
The MoU (Memorandum of Understanding) had also proposed the setting up of a separate trading platform for stocks exclusively listed on the CSE.
Getting brokers back to the exchange was a colossal task.
"After leaving the exchange in 2001, we never looked back. CSE is history now," said a broker.
Many brokers said that the timing of the demutalisation was wrong, as the economic downturn eroded investors' interest in stock markets.
"If CSE would have entered into a tie-up arrangement with BSE immediately after 2001, much of the damage could have been controlled," said a broker.
Some felt that instead of the tie-up with BSE, CSE should have associated with NSE.
"There is hardly any trade in the F&O segment in BSE. It also lacks volumes. Instead of associating with BSE, CSE should have opted for NSE," said B K Bararia, a broker at CSE.
Recently, companies listed in CSE got a boost when ten of them were put in the BSE trading list under the permitted category.
Another 12 were being vetted by the exchanges for trading on BSE, said sources.
There are about 3,000 companies listed on the CSE, and nearly 100 brokers at the exchange have begun using BSE's platform for trading.
"A bigger issue is to get more brokers to trade on the bourse and get shares listed. In addition, the payment settlement system had failed in crucial areas such as margin calculation on big trades. The system went wrong in 2001, when the exchange went bankrupt. The system has to be tested so that it doesn't go wrong again. Many brokers continue to face problems in the front-end, but the C-Star back-end is very strong, said some of the brokers.
In 2001, there was default to the extent of about Rs 100 crore at CSE. About 90 cases were still pending in the courts.
About 300 members from CSE were suspended by Sebi after the 2001 crisis. In July last year, many restrictions were lifted and many members got their licence back.