Metropolitan Stock Exchange’s Revival Plan: A New Hope with ₹238 Crore Investment
In order to continue operating and being eligible to trade, the Metropolitan Stock Exchange of India (MSE) has announced intentions to fund ₹238 crore in a new round. According to its latest statement, the exchange’s board has authorized the issue of 1.19 billion equity shares through private placement at ₹2 apiece (₹1 face value and ₹1 premium).
Key Investors and Stake Distribution
Notable investors participating in this round include:
- Billionbrains Garage Ventures (Parent company of Groww)
- Rainmatter Investments (Zerodha founders’ investment arm)
- Share India Securities
- Securocorp Securities India
Share India Securities alone is in talks to invest Rs 59.5 crore, acquiring a 4.958% stake, valuing MSE at around Rs 1,200 crore. However, this allotment will require shareholders’ approval during the extraordinary general meeting.
MSE: A Brief History
MSE, formerly known as MCX-SX, was founded in 2008 by entities led by Jignesh Shah. Following the NSEL scam, the exchange also underwent a change of ownership, with major banks such as SBI, PNB, Axis Bank and HDFC Bank investing in it, along with prominent investors such as the late Rakesh Jhunjhunwala and Radhakishan Damani.
MSE struggled with poor trading volumes in spite of these efforts, which caused its net value to drop precipitously. If the exchange’s net value drops below ₹100 crore, it would be closed, under the SEBI ruling from July 2023.
BSE’s Success Inspires MSE
The recent triumph of the Bombay Stock Exchange (BSE), which has succeeded in challenging the NSE’s hegemony in derivatives, has reinforced the MSE’s plan for resurrection. MSE’s distinctive stock exchange license and strategic investor interest appeared to be a glimmer of optimism amid the increasing official emphasis on fostering competition in the exchange area.
Challenges and the Road Ahead
Even if the current investment plan shows promise, MSE should concentrate on producing enough trade volume to keep things running. In order to successfully compete in a market that is dominated by the NSE and BSE, the exchange will also need to take use of the knowledge and assistance of its new investors.