Calcutta Stock Exchange to Mark Its Last Diwali in 2025 Ahead of Voluntary Exit
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.
Background 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 has a rich history, with many notable companies listed on its platform. However, 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. The exchange’s efforts to revive operations and contest SEBI directives in courts have been unsuccessful, leading to the decision to seek a voluntary exit from its stock exchange licence.
Voluntary Exit Process
According to CSE Chairman Deepankar Bose, the exchange has obtained approval from shareholders to exit the stock exchange business. The exchange has submitted an exit application to SEBI, which has appointed a valuation agency to undertake the valuation of the stock exchange.
Once SEBI grants exit approval for the 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 Investors and Traders
The voluntary exit of the Calcutta Stock Exchange is likely to have a significant impact on investors and traders who have been associated with the exchange. Many brokers and traders have expressed a sense of nostalgia and loss, as the exchange has been a part of Kolkata’s financial heritage for over a century.
However, the exit is also expected to bring some relief to investors who have been waiting for a resolution to the exchange’s regulatory issues. The sale of the exchange’s property and the continuation of broking activities by CCMPL are expected to provide some compensation to investors and stakeholders.
Regulatory Environment
The voluntary exit of the Calcutta Stock Exchange highlights the importance of regulatory compliance in the stock market. The exchange’s failure to comply with SEBI regulations led to its downfall, and the regulator’s actions have been instrumental in bringing about a resolution to the issue.
Investors and traders can learn more about the regulatory environment and the importance of compliance by visiting the SEBI regulations page. Additionally, they can stay updated on the latest news and developments in the Indian stock market by following reputable sources such as Indian stock market news.
Conclusion
The Calcutta Stock Exchange’s voluntary exit marks the end of an era in the Indian stock market. While the exit is a significant development, it also highlights the importance of regulatory compliance and the need for exchanges to adapt to changing market conditions.
Investors and traders can learn from the experience of the Calcutta Stock Exchange and stay informed about the latest developments in the Indian stock market. By visiting stock market analysis pages and following reputable sources, they can make informed investment decisions and navigate the complexities of the Indian stock market.
