Over 2 lakh retail investors, who have shares in the exiting regional stock exchanges, got a breather last week. The Securities and Exchange Board of India (Sebi) gave another 18 months to the companies exclusively listed on the exiting regional stock exchanges to migrate to the nation-wide stock exchanges.
Market experts believe Sebi is giving more time to exclusively-listed companies as the market regulator does not want the companies and investors to be deprived from listing and price-discovery through secondary markets. Companies are yet to move to nation-wide exchanges as they look to meet the compliance requirement of the nation-wide exchanges, added Arun Kejriwal, director at KRIS Research.
More than 3,000 companies are still exclusively listed on the exiting regional stock exchanges, data from Capitaline show. As many as 12 stock exchanges are at various stages of exiting from the exchange business after failing to meet the Rs 1,000-crore turnover criteria stated by Sebi.
In a circular on May 30, 2012, the market regulator had said the stock exchanges where the annual trading turnover is less than Rs 1,000 crore can apply to Sebi for voluntary surrender of recognition and exit, at any time before the expiry of two years from the date of issuance of the circular.
After that, Ahemdabad Stock Exchange, Madras Stock Exchange, Bangalore Stock Exchange, Hyderabad Stock Exchange, Ludhiana Stock Exchange, Mangalore Stock Exchange, Saurashtra-Kutch Stock Exchange and Kochi Stock Exchange have sought the exit option.
Meanwhile, if the exclusively listed companies fail to obtain listing on other stock exchange, it will cease to be a listed company and will be moved to the dissemination board by the exiting stock exchange. The dissemination board will be set up by stock exchanges having nationwide trading terminals, where a willing buyer and seller will be given an opportunity to disseminate their offers. The exclusively listed companies can also opt for voluntary delisting before the exchange is de-recognised.
