Unlisted shares of MSEI plunge as revival optimism fades away; price drops 65% since December

Shares of Metropolitan Stock Exchange of India (MSEI) have seen a huge 65 percent fall in the current calendar year in the unlisted segment as optimism around its revival faded away with stricter rules put in place in the equity derivatives segment.

MSEI shares are currently hovering a little below Rs 5, plunging nearly 14 percent in the last 15 days. More importantly, the shares have dropped nearly 65 percent since December – falling from Rs 14 to the current levels.

According to experts, the sentiments around MSEI turned bleak after the Securities and Exchange Board of India (SEBI) directed that only two days – Tuesday and Thursday – can be fixed as expiry days for the derivative contracts. This was after the regulator said that only one weekly expiry contracts would be allowed per exchange.

This assumes significance as there was a lot of traction in the shares of MSEI when new norms were announced for the F&O segment. It was believed that MSEI would be able to launch a weekly expiry contract with an expiry day different from that of NSE or BSE, which would help the exchange attract significant trading volumes. However, the SEBI diktat on only two days permitted for expiry dashed investor sentiments.

“The initial rally in MSEI’s share price was driven by investor optimism that the exchange would be allowed to launch weekly F&O contracts with an expiry date different from those of NSE and BSE. However, the recent SEBI regulation restricting this possibility dampened sentiment, leading to a correction in the stock,” says Umesh Paliwal, co-founder, Unlisted Zone.