The Hindu Business Line : HSE facing risk of de-recognition; board meeting today

Hyderabad, Aug. 21 The Hyderabad Stock Exchange Ltd (HSE), one of the oldest stock exchanges in India, is facing the risk of de-recognition due to poor response to its demutualisation scheme.

The HSE is required to complete the demutualisation scheme on or before August 28, according to Securities Contracts Regulations 2006 notified by Securities and Exchange Board of India (SEBI).

“There is lukewarm response to our offer to offload 51 per cent of outstanding capital and the risk of de-recognition is looming large over the exchange.” Mr Someshwar Rao, Executive Director, HSE, told Business Line her e on Tuesday.

The company had called for expression of interests (EoI) on June 17 by fixing July 31 as last date for receipt of final payment for bidding.

“Though 67 investors have approached initially, most of them withdrew from the fray for various reasons. Out of nine parties that had paid Rs 10,000 fee, only two/three parties are still in fray with unconfirmed interest,” Mr Rao explained.

When asked whether HSE would seek an extension of deadline to complete the process, the official said it was ruled out. “SEBI has categorically refused any extension of deadline. That is why we stand the risk of losing permanent recognition to trade granted by Government of India,” he said.

The final fate of exchange, however, would be known on Wednesday. “Tomorrow we have a crucial meeting of our board of directors to take stock of the situation and find out ways and means to avoid de-recognition. We will do our best,” Mr Rao said.

HSE, a depository participant of both CDSL and NSDL, has its own active platform and had uninterrupted trading so far. It has over 292 trading members and around 774 listed companies.