Metropolitan Stock Exchange of India Ltd (MSEI), erstwhile MCX-SX, has drawn a turn-around plan to build itself as a strong third stock exchange of the country beside preparing ground to seek FDI investment from overseas bourses.
"We have drawn a five year turn-around plan in two phases. In the first phase we will focus on product innovation and increasing trading volume," MSEI Managing Director and CEO Udai Kumar said here today.
With Union budget having opened door for FDI upto 15 per cent, another door opens for the bourse at its nascent stage to raise resources through FDI route along with expertise of a global bourse.
"We are preparing our groundwork. Our merchant bankers have sounded us. We are not pursuing much now as we want to implement turnaround strategy first for better valuation," MSEI CFO & corporate strategy Abhijit Chakraborty said.
"We need only Rs 20-25 crore for the clearing corporation for regulatory requirement which is not much and we are already in touch with banks to raise that as equity. So, we are not in hurry for FDI money," he said.
The bourse was targeting business increase to Rs 6000 crore per day from Rs 1,000 crore per day by FY17.
"Since February and March the turnover has almost doubled to Rs 1000 crore per day after we worked hard to remove the hurdles for clients," Kumar said.
Almost 95 per cent of its turnover is generated from currency derivatives.
MSEI which decides not to focus on tradional equity and equity derivatives as BSE and NSE has established leadership and instead it will focus on currency, interst rate, debt and other niche financial products, Chakraborty said.
However, MSEI was also planning to introduce a window
for 'bulk and block deals' of equities where risks and smoothness for institutional clients will be better than NSE and BSE due to lack of liquidity, he added.
Besides, the bourse is planning to reduce the transation cost mainly for small participants and the same could go as low as Rs 40-50 per crore, down from Rs 105 a crore, Kumar said.
He said the BSE has adopted predatory pricing and gone as low as Rs 10-15 per crore.
"We cannot contest to complain as they are not 'dominant' player in the segment as what we have able to do in case of NSE where we got respite from Competition Commission," Kumar said.
MSEI has also approached RBI for Rupee indices Benchmarked with all major currencies and launching sponsored ETFs in partnership with AMCs, the officials of the bourse said.
The bourse aims to breakeven in Q4 of FY17 against projected Rs 40 crore loss for FY16.
