London-based GMEX Group will pick up 5% stake in Metropolitan Stock Exchange of India (MSE) and will help the domestic bourse develop new product categories and related infrastructure facilities.
GMEX, which offers sustainable and innovative solutions for capital markets, would also acquire 5% stake in Metropolitan Clearing Corporation of India, an arm of MSE.
“Currently, though we already have 63 Moons, formerly known as Financial Technologies (India) Ltd, as our technology provider, but we have always felt constrained and challenged when we were thinking of launching new products and segments,” MSE managing director and chief executive officer Udai Kumar said. “In this context, we came across GMEX, who have the ability to give exchange advisory and suggest new products. To add strategic depth to the relationship, the proposal envisages a potential equity investment by GMEX in MSE and its subsidiary Metropolitan Clearing Corporation,” he added.
MSE, which is looking to rapidly increase its market share, is planning to introduce new trading products on its platform in a few months time and is also likely to introduce new products in currency derivative segments. The stock exchange currently has only 5% market share in the currency derivatives, a segment which is largely dominated by the National Stock Exchange.
The collaboration includes product development in the existing segments and launching new product categories, increased focus on technological innovations and development of market infrastructure for new products. “Advanced business and technology enablement that we bring to the MSE and MCCIL (Metropolitan Clearing Corporation of India Ltd), will facilitate new strategic opportunities not only within India but also internationally,” GMEX chairman and chief executive officer Hirander Misra said.
Asked about its technology pact with 63 Moons, Kumar said the company would continue to be a technology provider to MSE. “Our relationship will continue with 63 Moons, other than technology provided by 63 Moons we will collaborate with GMEX to give us product related services,” Kumar said.
Kumar also told PTI that MSE has negotiated with 63 Moons on the contract price. “The annual maintenance costs have come down from Rs48 crore to Rs9 crore and we are in discussions to reduce it further. Our market research shows that it should be about Rs5-6 crore,” Kumar said.
MSE’s shareholders include India’s top public and private sector banks and domestic financial institutions, who together hold over 34% stake in the exchange. Besides ace market men Rakesh Jhunjhunwala, Radhakishan Damani and Nemish S. Shah also have shareholding in the bourse.
Source: Mint