Small cap firms listed with Madras Stock Exchange to be hit with its closure
Updated: Apr 30, 2014 12:59:50pm
The stock exchange is required to meet the criteria before May 30.
Some of these small cap firms even get traded on the National Stock Exchange (NSE) without being listed with it due to the ‘in-principle’ tie-up that the MSE has with the NSE.
As the charges of listing with the NSE or the Bombay Stock Exchange are higher, the small cap firms will not get the benefit.
Some of the small companies listed on the MSE are - United Nilgiris Tea Estates, Amrutanjan Health Care, Lakshmi Mills, Peria Karamalai Tea and Beardsell Ltd.
The MSE will be losing its status as a stock exchange as it has failed to meet certain regulatory requirements such as the achievement of a net worth target of Rs.100 crore and the Rs. 1,000 crore annual turnover. The stock exchange was also required to establish its own clearing facility or have a tie-up with a national-level clearing corporation.
Earlier last month, Sebi did not give its consent to MSE's trading platform, supplied by NSE IT (a subsidiary of the National Stock Exchange). The regulator said the exchange also did not have sufficient net worth to undertake clearing operations or settlement of trades, a media report said.
On May 30, 2012 Sebi circular asked MSE to earn Rs 1,000 crore as annual turnover and have a net worth of Rs 100 crore or more by May 30, 2014, failing which the exchange should consider "exit" options. (KNN/SD)