Interconnected Stock Exchange of India Ltd (ISE), promoted by regional stock exchanges, will launch a common trading platform early next year to provide its members direct access to trade in securities listed both on the BSE and NSE. The move is expected to challenge the market share of NSE and BSE, the two dominant players in the Indian market. To start with, ISE will provide nation-wide trading facility only in the cash equity segment.
Currently, ISE and regional stock exchanges have floated their wholly-owned broking subsidiaries, having membership with BSE and NSE, through which their members trade in shares listed on either of the exchanges. ?We have received bids from three leading software companies for installing trading software that will be finalised by the end of this month. Once the software is installed we will list securities listed on the BSE and NSE under the permitted to trade category,? said PJ Mathew, MD, ISE.
Currently, the average daily value of trade in ISE Securities and Services Ltd (ISS), the broking subsidiary of ISE, is close to Rs 300 crore, according to Mathew, and the combined turnover including the RSEs is in the range of Rs 1,500-Rs 2,000 crore. Compared to this, NSE generates an average daily turnover of around Rs 20,000 crore in the cash equity segment with 75% share of the market, while BSE generates a turnover of around Rs 6,500 crore. ?We are expecting at least 20% of the volume to shift to ISE trading platform in the initial stages,? he said.
ISE has a total of 825 trading members, of which 430 trade through its broking subsidiary ISS in the Indian securities market. ISS has 2,800 trading terminals installed nationwide. Together with the other regional stock exchanges there are a total of 3,000 trading members across the country. Mathew said, ?Our members have a big presence in rural India. Once we launch the nationwide trading facility, we are hopeful of taking advantage of our rural presence.?
ICSE was conceptualised as a stock exchange to provide a common trading platform to members of all participating regional stock exchanges to boost trade in the securities listed on these exchanges. That did not take off due to lack of liquidity and other differences.
However, this time ISE will consider roping in strategic partners. ?Overseas exchanges and domestic financial institutions have approached us. We will be open for stake sale only after launching the trading service by which we will be able to reach a fair valuation,? said Mathew.
