Cash-strapped MSEI works on revival plan

Cash-starved Metropolitan Stock Exchange of India (MSEI), formerly MCX Stock Exchange (MCX-SX), has listed around 130 companies and is in the process of doing so for another 40 on its platform. Most of these were earlier listed on the now-defunct Delhi Stock Exchange.

MSEI is struggling due to dwindling volumes and inadequate reserves. Getting companies from regional exchanges is part of a turnaround strategy, to stay afloat in the highly competitive segment.

“We charge Rs 5 lakh from each company at the time of listing and annual listing fees, which over a period of time will become a steady revenue stream,” said a spokesperson. The annual fee would be Rs 50,000 for listed companies with paid-up capital above Rs 20 crore.
 

Revenues from the listing business, however, might not be sufficient for the exchange and its subsidiary, Metropolitan Cle-aring Corporation (MCCI), to meet their net worth requirement. As on Dece-mber 2015, MCCI had net worth of Rs 75.5 crore, below the Rs 100 crore mandated by Sebi for exchanges and clearing corporations.

MSEI claims the exchange already complies with the net worth requirement and is making efforts to raise equity capital to fulfil that of its clearing corporation arm.

Sebi is putting constant pressure on the exchange to present its revival plan and the latter has sought more time. A board meeting is planned later this month to discuss ways to shore up the net worth of the clearing corporation and to improve market share in the currency derivative segment.

The exchange also plans to introduce trading in exchange-traded funds and structured products.

The recast plan is aimed at ramping up daily turnover to Rs 6,000 crore by the end of this financial year, from the present Rs 1,000 crore.

The exchange says it has a Settlement Guarantee Fund (SGF) corpus of Rs 665 crore, of liquid assets. MCCI maintains a core SGF of Rs 43 crore.

In the wake of the Rs 5,700 crore payment crisis at the National Spot Exchange, MSEI had distanced itself from its former promoter, Financial Technologies, and the MCX brand, earlier part of the same group.  

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STAYING AFLOAT

• Metropolitan Stock Exchange adds 170 more companies
   
• These were earlier listed with defunct Delhi Stock Exchange
   
• Efforts to comply with net worth requirements to fund its clearing corporation
   
• Exchange sought extension from Sebi for its clearing corporation net worth compliance
   
• MSEI clearing corporation is yet to meet net worth criterion of Rs 100 crore
   
• The board of directors of exchange meeting last week of this month
   
• To decide measures to improve its market share in the currency derivative segment
   
• Aims to ramp up turnover to Rs 6,000 crore from the present Rs 1,000 crore by 2016-17.