The proposed buy-out of Delhi Stock Exchange by Bombay Stock Exchange might bring out a sigh of relief from many. But the move has important implications for the survival strategies of other regional stock exchanges across the country. Is this merger a forerunner to many more such mergers?

The 127-year-old Bombay Stock Exchange (BSE) has been on a roller-coaster ride for quite some time now. Its virtual monopoly ended when National Stock Exchange (NSE) came into the picture and took away its market share and volumes. In fact BSE's plight at one point of time in the recent past was so bad that its very sustenance was questioned. Volumes were steadily falling and NSE was emerging as a major competitor. BSE is bracing up to meet the challenge and as a first step it is merging with the Delhi Stock Exchange (DSE). BSE had initially proposed the merger in 2000 but DSE had declined the proposal then as it had already entered into an MOU with Calcutta Stock Exchange. However, BSE's proposal was finally accepted in September 2001.

The merger deal might take some time to go through, as the consolidation of DSE and BSE will be finalized only after Corporatization and Demutualization of BSE. Such a consolidation exercise would benefit the members of both the Stock Exchanges to leverage their respective strengths and will also obtain access to the efficient and more liquid trading platform provided by BSE.

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