Two international exchanges led by BSE Ltd and National Stock Exchange (NSE) Ltd in the Gift City in Gujarat have called off their much-anticipated merger, according to two persons aware of the development. This is a major setback to GIFT City’s ambitions of becoming a global financial hub.
The talks were called off by the BSE because the discussions, which were on since late 2022, had failed to make any headway, one of the persons cited above said on the condition of anonymity.
The merger between BSE subsidiary India INX and NSE IX was expected to enhance trading volumes and attract international investors to Gift City, where the average daily turnover on international exchanges runs into billions of dollars.
A BSE spokesperson confirmed that the merger talks are “off the table” but declined to comment on the reasons for the decision. Attempts to reach a spokesperson of the NSE were unsuccessful.
“The merger was driven by the IFSCA’s objective of making Gift City a global financial centre rivalling the likes of Singapore, Hong Kong, Luxembourg, and Dubai. To that end, the talks having ended are a setback,” the person cited earlier said.
IFSCA, India’s unified regulator for international financial services centres such as the Gift City, aims to promote the country as a global financial hub.
Another person said that despite their rivalry in India, the regulator of Gift City was of the view that the merger would strengthen the country’s bid to become a global financial hub. “The merger talks failing are a disappointment,” he said.
NDTV Profit was the first to report about merger talks falling through.
India INX was the first international stock exchange to start operations at the GIFT City in January 2017. NSE IX followed shortly after, in June 2017.
The boards of BSE and NSE had approved the merger in the latter half of 2022, following key executive changes. Ashishkumar Chauhan moved to NSE as its managing director and CEO from BSE, while Sundararaman Ramamurthy, who previously worked with Chauhan at NSE, joined BSE as its MD & CEO in January 2023.
V. Balasubramaniam, MD & CEO of NSE IX, joined from India INX in December 2022, where he held the same position. He had also closely worked with Chauhan at BSE.
NSE IX dominates the market in Gift City with a 95% share and has recorded a turnover of $116.08 billion from 1 April to 22 May of the current fiscal year. The remaining market share is held by India INX.
