Several small-cap companies listed on the Calcutta Stock Exchange (CSE) are in the process of getting listed on the Bombay Stock Exchange (BSE) as 'Permitted Securities' to capitalise on the latter's higher potential for business.
Ten such firms have already migrated to BSE's platform in the last seven to eight months, taking advantage of the Kolkata exchange's demutualisation in 2007, followed by its subsequent association with BSE which even picked up a 5 per cent stake in CSE. Demutualisation is a process which precedes the corporatisation of an entity.
At the time, 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.
The companies that have already listed on BSE under the arrangement include Lohia Securities Ltd, Brahmanand Himghar Limited, Mavens Biotech Limited, Kanco Enterprises Ltd, Maithan Alloys Ltd, Gloster Jute Mills Ltd, Eastern Gases Ltd, Joonktollee Tea and Industries Ltd, Ellenbarrie Industrial Gases Ltd and Adinath Bio-Labs Ltd.
In fact, another ten CSE-listed companies have now lined up for a BSE-listing under the special category – Acme Resources, Belton Properties, Hevel Commercial, Phosphate Company, Khubsoorat Ltd, Sunil Healthcare, Snow White Ltd, Richfield Financial Services and Plenty Valley Infrastructure. CSE is currently processing the required papers.
CSE had also sought the listing of two public sector companies – Andrew Yule and Orissa Mineral Development Company (OMDC), on the BSE, according to sources.
But Molly Thambi, Chief Executive Officer of CSE, refused to comment on the issue.
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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. Basically, the listing of CSE companies on the BSE is viewed as a migration to a better trading platform. Especially since there was hardly any trading on the CSE since its 2001 payments crisis.
A similar view was echoed by Gloster Jute Mills – one of the CSE-listed companies under the 'Permitted Securities' category on the BSE, and in which Life Insurance Corporation (LIC) has a stake of nearly 23 per cent stake.
"CSE has been lying defunct for some time, and we were looking at migrating to some other exchange. There was no trading at CSE. But trading on the BSE will allow better price discovery, even though the company has not opted for any public issue," a spokesperson said.
At present, the daily turnover of CSE is close to Rs 12-13 crore, with BSE-listed companies accounting for a major portion of it.