The Rs 856-crore claim by Metropolitan Stock Exchange of India (MSEI) against National Stock Exchange (NSE) is scheduled for hearing by the National Company Law Appellate Tribunal (NCLAT) on 10 October 2017. MSEI had dragged NSE to the Competition Commission of India (CCI) citing monopolistic practices. The competition watchdog held NSE guilty and asked it to compensate MSEI.
Metropolitan Stock Exchange of India (MSEI), India’s new stock exchange, is recognised by Securities & Exchange Board of India. It is India’s third functional and recognised stock exchange after BSE and NSE. There is huge demand for shares of MSEI due to strong listing of BSE and upcoming IPO of NSE. A clutch of financial institutions now own more than 34% of MSEI, as do investors including Rakesh Jhunjhunwala, Radhakishan Damani and Nemish Shah.
In 2008, both MSEI and NSE launched currency future contracts almost simultaneously. NSE priced the transaction charges on these contracts at zero and given NSE’s dominant position, MSEI was left with no choice but to adopt zero pricing as well.
This made a significant and material dent in the financial position of MSEI, which filed a complaint with CCI alleging predatory pricing (waiver of transaction fees, data-feed fees and admission fees) wherein CCI found NSE guilty and imposed a fine of Rs 55.5 crore. NSE filed an appeal with the Competition Appellate Tribunal (COMPAT), which too found NSE guilty. NSE then moved the Supreme Court and its appeal is still pending.
According to the process, the exchange has filed an application for award of compensation against NSE for Rs 856 crore before COMPAT, pending the appeal. Now, as COMPAT ceased to exist (from May 26), all pending matters before COMPAT stand transferred to the NCLAT.
Udai Kumar, MD & CEO of MSEI,said, “MSEI started out as a fast-growing exchange with immense potential, when it was deeply impacted by the financial burden imposed by NSE’s predatory pricing. Speedy disposal of this matter is the need of the hour. “It will encourage transparency and compliance with existing competition laws and practices across the spectrum and also dis-incentivise anti-competitive practises and misuse of dominant position.”
Our one more hot favorite pre-IPO stock is launching IPO tomorrow. But not before delivering multibagger returns to investors. One more baby is ready to fly high and scale new heights.
ICICI Lombard sold to all our investors at as low as Rs 70 since 2013 has become 10x to Rs 700+ in just around 4 years. That’s the power of investing in unlisted shares. The company’s initial public offer (IPO) will open on September 15 and close on September 19. The price band is Rs 651 to Rs 661 per share.
The recent market buoyancy has triggered an IPO boom. Companies with good fundamentals are seeing huge oversubscription leaving investors with nil or low allotment. This is very annoying as there is a loss of opportunity to make profit in form of listing gains. That’s why it makes sense to invest in good companies to get capital appreciation and assured quantity. Applying in IPO is a traditional and loss making concept while Pre IPO investing is a modern and highly profitable approach.
The Securities and Exchange Board of India (Sebi) and the Ministry of corporate affairs is considering making dematerialisation (demat) of shares mandatory for all unlisted companies. While listed firms are required to maintain shares in dematerialised form, there is no such specific requirement in the case of unlisted entities — both public and private.
Sebi rules require all listed companies to dematerialise shares. About 70,000 public limited companies are unlisted and more than 1 million private limited companies are registered with the corporate affairs ministry.
An unlisted public company is one which has more than 50 shareholders, a higher minimum capital requirement of Rs5 lakh and needs to comply with statutory requirements such as holding meeting with shareholders and capping director remuneration.
A meeting of the depositories National Securities Depository Ltd and Central Depository Services Ltd on 12 September 2017 to gauge their preparedness and the transition requirements to meet the proposal. Considering the number of companies and shares, it could be a massive exercise.
The move will bring down the number of frauds relating to dividend payouts and equity shares. In the absence of 100% demat of securities of listed or unlisted public companies, fundamentally weak companies can always issue duplicate shares to their promoters/persons, which can be pledged with different financiers to get funding.
Dematerialisation, or demat, is the process by which physical certificates of an investor are converted to an equivalent number of securities in electronic form and is aimed at eliminating fraud and theft while making trades trackable. India embarked on the process in 1996 and almost all shares of listed companies are held in the demat form. India has about 6,000 listed companies.
ICICI Lombard is a joint venture between ICICI Bank and Canada-based Fairfax Financial Holdings Ltd. The company is the largest private-sector non-life insurer in India based on gross direct premium income in fiscal 2017. It was valued at Rs 20,300 crore as per the last deal.
The issue consists of offer for sale of up to 3,17,61,478 equity shares by promoter ICICI Bank, up to 5,44,85,709 shares by investor Fal Corporation. The issue also include a reservation of up to 43,12,359 equity shares for purchase by ICICI Bank shareholders.
The Metropolitan Stock Exchange of India (MSEI) plans to woo brokerages to execute large stock trades on its venue. The exchange is also developing short-term debt instruments to help mutual funds and insurance companies hedge their portfolios. Products launches in currency, interest rate futures and corporate bonds are also planned.
Backed by billionaires Rakesh Jhunjhunwala and Radhakishan Damani, MSEI aims to wade into the block deals segment, which is worth as much as Rs 5 trillion ($78 billion). India’s regulator defines a block as a single trade having at least 500,000 shares or a minimum value of Rs 5 crore. Money managers like dealing in large sizes because it ensures transactions are done before the market can hear about them and react by raising or lowering prices.
We are telling institutional investors to come to our platform—there will be no slippages or price impact, said Kumar, who was named chief executive officer last year to turn around the bourse. The MSEI is in talks with half a dozen large investment banks to bring in such deals, he said.
The MSEI, which has been making losses, expects to return to profitability by March 2020. We can lead in areas where the BSE and NSE have limited play, Kumar said.
A clutch of financial institutions now own more than 34% of MSEI, as do investors including Jhunjhunwala, Damani and Nemish Shah.
The MSEI got 250 companies to list exclusively on its venue—most of whom migrated from the 15 regional bourses the market regulator shut down three years ago—and slashed fees and transaction costs to levels it claims are the lowest in the country.
Metropolitan Stock Exchange of India (MSEI), India’s new stock exchange, is recognised by Securities & Exchange Board of India. It is India’s third functional and recognised stock exchange after BSE and NSE. There is huge demand for shares of MSEI due to strong listing of BSE and upcoming IPO of NSE.