MSEI: A Revival Story in the Making
The Metropolitan Stock Exchange of India (MSEI), initially launched as MCX Stock Exchange in 2008, faced challenges including low trading volumes, dominance by NSE and BSE, and financial difficulties that rendered it a "dead exchange".
A turning point for MSEI arose from SEBI's new regulations, effective after November 20, 2024, mandating that exchanges can only offer one weekly expiry for derivatives contracts. MSEI intends to capitalize on this through exclusive weekly expiries on Fridays for its SX-40 index, a day when NSE and BSE offer no such products. This could attract traders seeking additional opportunities and enhance liquidity on the exchange.
MSEI also has a pending legal case against NSE, alleging misuse of dominant position and claiming damages of ₹800 crore. If successful, this would improve MSEI’s financial health, rebuild its infrastructure, and boost investor confidence.
Recently, leading financial players such as Zerodha, Groww, and Share India, have invested ₹240 crore at ₹2 per share, increasing the total shares outstanding to 600 crore and setting the current valuation of MSEI at ₹7200 crore (₹12 per share).
While prospects are promising, challenges remain. MSEI must regain the trust of both retail and institutional investors, build liquidity, and compete with established exchanges like NSE and BSE.
Financial data shows revenues of 10.63 Cr, 10 Cr, 9 Cr, 7 Cr in FY21, FY22, FY23, and FY24 respectively. PBT figures are -30.67 Cr, -31 Cr, -20 Cr, -48 Cr. PAT figures are -31.08 Cr, -30 Cr, -18.7 Cr, -49 Cr. EPS figures are -0.06, -0.06, -0.04, -0.1.
The top shareholders are Individuals (55.59%), Bodies Corporate (17.85%), Financial Institution/Banks (14.94%), and Others (7.62%).
On December 24, 2024, the Board of Directors approved a private placement of up to 119 crore equity shares at ₹2 each to Groww, Zerodha, Securocorp Securities, and Share India Securities (₹60 Cr each).
In conclusion, MSEI is positioned for a significant turnaround due to regulatory support and strategic initiatives. Its success will depend on execution and market acceptance.
