You are using an older browser version. Please use a supported version for the best MSN experience.

BSE, USE boards approve merger

LiveMint logoLiveMint 15-05-2014 Ashish Rukhaiyar

Mumbai: The boards of the Bombay Stock Exchange (BSE) and the United Stock Exchange (USE) have approved the merger of both exchanges, a spokesperson for BSE said on Thursday.

BSE is the largest shareholder in USE with a 15% stake. Several banks are common shareholders in BSE and USE.

USE has been seeing a steady decline in its turnover. According to data available on its website, the total turnover on 15 May was pegged at `352.88 crore, which is significantly lower than that of the currency derivatives segment of the National Stock Exchange (NSE) and the MCX Stock Exchange (MCX-SX).

On Thursday, the currency derivatives segment of NSE reported a turnover of `15,846 crore while MCX-SX saw currency futures being traded to the tune of `4,866 crore. USE, meanwhile, saw the turnover in the range of `161 crore and `415 crore in the last five trading sessions.

Industry experts say that merger was the only option available for USE as the net worth of the exchange was shrinking and was quite close to the minimum `100 crore as mandated by the Securities and Exchange Board of India (Sebi). According to the financial statement issued by USE, the net worth of the exchange as on 31 December 2013 stood at `118.13 crore.

“It is a logical step to take. At this juncture, BSE, which has 15% stake in USE, had two options. One was to sell its stake; but then, the question arises as to who would buy the stake and then put more money to enhance the net worth. The second option was to merge with itself,” says J.N. Gupta, managing director, SES Governance, a corporate governance advisory.

For the three months ended 31 December 2013, USE reported a loss of `57.13 lakh.

More From LiveMint

image beaconimage beaconimage beacon