Calcutta Stock Exchange Closing Down After 117 Years: A Look at the Journey
The Calcutta Stock Exchange (CSE), one of India’s oldest bourses, may be celebrating its last Kali Puja and Diwali as a functioning exchange in 2025, as per a report by PTI. If this transpires, this will mark the end of a 117-year-old journey. The exchange is now moving toward a voluntary exit following years of legal struggles and regulatory woes.
Background of the Calcutta Stock Exchange
Founded in 1908, the Calcutta Stock Exchange was once a formidable rival to the Bombay Stock Exchange, dominating trade volumes and serving as the financial nerve centre of Kolkata’s Lyons Range. The exchange’s decline began after the Rs 120-crore Ketan Parekh scam, which led to broker defaults and dealt a severe blow to investor confidence.
Regulatory Hurdles and Suspension of Trading
Trading at the CSE was suspended by SEBI in April 2013 due to non-compliance with regulatory requirements. Over the past decade, the exchange made many attempts to resume operations and contest SEBI’s decisions in court. However, the exchange’s efforts were in vain, and it ultimately decided to seek a voluntary exit.
Voluntary Exit and Restructuring
In December 2024, the CSE board decided to withdraw all ongoing cases pending before the Calcutta High Court and the Supreme Court, choosing instead to seek a voluntary exit. The exchange formally applied to SEBI on February 18, receiving shareholder approval on April 25. As part of its restructuring, the CSE launched a Voluntary Retirement Scheme (VRS) for all employees, offering a one-time payout of Rs 20.95 crore.
Impact on Indian Investors and Regional Stock Exchanges
The CSE’s closure marks the end of an era for India’s regional stock exchanges, which once thrived before trading activity consolidated around Mumbai’s electronic platforms. Indian investors who had invested in companies listed on the CSE will need to take note of the developments and consider their options. The closure of the CSE also raises questions about the future of regional stock exchanges in India and their ability to compete with larger exchanges like the NSE and BSE.
What’s Next for the Calcutta Stock Exchange?
The CSE has denied reports about its closure, calling them incorrect. Exchange officials told NDTV that the CSE remains operational and has not received any regulatory approval to wind down its business. The exchange has also said that it will issue an official statement after Diwali. However, if SEBI gives its nod, the CSE will remain a holding company with its subsidiary, CSE Capital Markets Pvt. Ltd. (CCMPL), carrying on broking business on the NSE and BSE.
Conclusion
The Calcutta Stock Exchange’s journey is a testament to the evolving nature of the Indian stock market. As the market continues to consolidate, regional stock exchanges will need to adapt to the changing landscape. Indian investors will need to stay informed about the developments and consider their options in light of the CSE’s closure. For more information on the Indian stock market and stock market news, visit our website.