Calcutta Stock Exchange: A Legacy Comes to an End
The Calcutta Stock Exchange, one of India’s oldest bourses, may this year celebrate its last Kali Puja and Diwali on October 20 as a functioning exchange, with the process of voluntary exit as a bourse nearing completion after a decade-long legal battle.
A Brief History of the Calcutta Stock Exchange
Founded in 1908, the 117-year-old institution once rivalled the Bombay Stock Exchange in trading volumes and stood as a symbol of Kolkata’s financial heritage. The exchange played a significant role in India’s capital markets, with 1,749 listed companies and 650 registered trading members at its peak.
The Decline of the Calcutta Stock Exchange
The decline began after the Rs 120-crore Ketan Parekh-linked scam triggered a payment crisis at the Calcutta Stock Exchange, as several brokers defaulted on settlement obligations. The episode shattered investor and regulator’s confidence, resulting in a prolonged erosion of trading activity.
Voluntary Exit: What Does This Mean for Indian Investors?
Trading at CSE was suspended by SEBI in April 2013 following regulatory non-compliance. After years of efforts to revive operations and contest SEBI directives in courts, the exchange has now decided to back out of the business and seek a voluntary exit from its stock exchange licence. This decision has been approved by the shareholders, and the exchange has submitted its exit application to SEBI.
Once SEBI grants exit approval for stock exchange business, CSE will function as a holding company, while its 100 per cent subsidiary, CSE Capital Markets Pvt Ltd (CCMPL), will continue broking as a member of NSE and BSE. The regulator has also cleared the proposed sale of CSE’s three-acre property on EM Bypass to the Srijan Group for Rs 253 crore, expected to be executed post-exit approval by SEBI.
Impact on Indian Investors
The voluntary exit of the Calcutta Stock Exchange is likely to have a minimal impact on Indian investors, as the exchange has not been operational since 2013. However, it marks the end of an era for the city of Kolkata, which once had a thriving stock exchange. Indian investors can still trade on other stock exchanges, such as the National Stock Exchange and the Bombay Stock Exchange.
Conclusion
The Calcutta Stock Exchange’s voluntary exit is a significant event in the history of Indian stock markets. While it may not have a direct impact on Indian investors, it marks the end of an era for the city of Kolkata. As the Indian stock market continues to evolve, it is essential for investors to stay informed about the latest developments and trends. For more information on Indian stock market news and stock market tips, visit our website.
