MSE to seek strategic FI investment if merger talks with BSE fail

Our Markets Bureau

Chennai, Nov 19: The Madras Stock Exchange (MSE) would look for strategic investment by foreign and domestic financial institutions (FIs) if its merger talks with The Stock Exchange, Mumbai (BSE) failed to fructify in six months’ time.

Addressing a press conference here on Monday, MSE president DN Das said that the regional exchange has been in talks with the BSE for a possible merger.

However, no tangible result has been in sight so far. He said there are several issues that have yet to be settled before the talk could reach a logical end. “There are issues like capitalisation of MSE and several tax related problems like one-time exception from capital gains tax that have to be resolved before the merger can take place,” the MSE president said.

He, however, said that if the negotiations did not fructify in the coming six months, MSE would call off the entire process and would look for other opportunities.

“The alternative plan we have is to attract investment from foreign, or domestic institutions to infuse fresh capital. We will turn to this option if the talks with BSE fail to materialise in the next six months’ time,” Mr Das said.

He said MSE has also firmed up certain plans to ramp up its operations and business. As part of it, the bourse is expanding its depository participant (DP) operations. “As of now, we are only clearing trades for our members. We are now planning to offer the DP service through our subsidiary company to the general public. We expect to kick off this service by January next, and by March next we expect to have a membership of 5,000,” he said.

MSE is also in the process of introducing a derivative segment through its subsidiary MSE FSL by February next. “We are considering the issue of introducing debt trading also,” he said.