The last lifeline of India's regional stock exchanges could be yanked very soon. Thanks to screen-based trading, the days of multiple listing on the regional stock exchanges are drawing to a close.
Companies listed on the multiple stocks exchanges are now seeking voluntary delisting from regional stock exchanges to save on the costs associated with maintaining these listings.
The voluntary delisting trend which started after the introduction of screen-based trading, first by the National Stock Exchange and then the Bombay Stock Exchange, is gathering momentum in 2003.
In 2002 as many as 88 companies informed the BSE that their respective boards had resolved to delist their stocks from all bourses other than the main stock exchanges.
Instead of paying annual charges to all, they preferred it to pay to the stock exchange where the stock was traded the most.
Asian Paints said last Monday that it was in the process of "voluntarily" delisting its shares from seven regional stock exchanges owing to the "extremely low" volume of trading in its shares on these bourses.
The leading paints maker, however, plans to continue listing its shares on the BSE and the NSE. Its chairman, Ashwin Choksi, informed shareholders that the company is seeking delisting its securities from the Delhi, Kolkata, Chennai, Ludhiana, Ahmedabad, Hyderabad and Vadodara exchanges.
Asian Paints may not be the only example in the A group. The list of companies which seek to delist from the other exchanges has all categories.
Of the 88 companies, five are from group A, nineteen from group B1, 52 from group B2 and four from group Z. Blue-chip companies in the A group that have sought delisting from the smaller exchanges are Asian Paints, LML, Sun Pharmaceuticals and Tata Telecom.
The most prominent B group stocks in the list are Birla Corporation, Honda Siel Power, Kajaria Ceramics, Omax Autos and Kajaria Ceramics.
Sun Pharmaceuticals has delisted its shares from the Ahmedabad, Calcutta and Delhi stock exchanges. while two wheeler maker LML is planning to delist its shares from the Delhi Stock Exchange.
Most companies are seeking to delist their shares from the Ahmedabad and Delhi stock exchanges. The volume on these exchanges has been very poor during the last one and half years.
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