Chennai had its own stock exchange for 78 years. The Madras Stock Exchange (MSE) was registered on 12 August 1937 and closed its exchange business when the Securities and Exchange Board of India (SEBI) granted it exit on 14 May 2015. It was the fourteenth regional exchange to leave under SEBI’s exit policy.
If you hold old share certificates of a Tamil Nadu company that was listed only on the MSE, or you simply wonder why the city no longer has a bourse, this is the story and what it means now.
Two beginnings: 1920 and 1937
A history written for Madras Musings in 2010 by M. Amarnath, then chief executive of the broking firm Paterson and Co., describes a first attempt in April 1920. Madras had enough brokers by then to start an exchange in a rented building on Broadway; it enrolled about 100 members, of whom around 25 were active. A recession after 1923 hollowed out trading.
The exchange that lasted was registered on 12 August 1937. The same account names Paterson and Co., whose R.C. Paterson pushed for the exchange, as one of its five founding members, alongside Kothari’s and India Brokers’ among others. For most of the next half-century the MSE was where Madras companies such as textile mills, plantation firms and consumer brands raised capital and where local investors traded them.
Why it closed
The end came from rule changes, not a single crisis. Once the National Stock Exchange and BSE offered screen-based trading across the country, regional exchanges lost volume. SEBI’s circular of 30 May 2012 set the terms for regional exchanges that could not meet its standards to wind down. As reported by Business Standard, those standards included a minimum net worth of ₹100 crore and annual trading of ₹1,000 crore, with two years to comply.
The MSE did not meet them. At an extraordinary general meeting on 26 May 2014, shareholders passed a special resolution for voluntary exit with an 85% majority, according to Business Standard. People inside the exchange told the paper that it had good prospects and that the regulator’s norms had forced the decision. The paper also noted that the MSE had been the largest regional exchange by cash volume in the 1990s.
SEBI whole-time member Rajeev Kumar Agarwal passed the exit order in May 2015, finding that the exchange had substantially complied with the 2012 circular and had disclosed all known liabilities. SEBI’s release said the Income Tax department, the Ministry of Corporate Affairs and the Tamil Nadu government were to be told so they could take any action needed.
Chennai was not alone. Before the MSE, the Coimbatore, Bangalore, Mangalore, Kochi and Hyderabad exchanges had already left the business, Business Standard noted in 2014, so Tamil Nadu lost both its regional exchanges within a few years.
Timeline
| Date | Event |
|---|---|
| April 1920 | First exchange starts on Broadway with about 100 members |
| 12 August 1937 | Madras Stock Exchange registered |
| 30 May 2012 | SEBI issues exit policy for regional exchanges |
| 26 May 2014 | Shareholders vote to exit, 85% in favour |
| 14 May 2015 | SEBI grants exit, the 14th regional exchange to go |
What happened to companies and investors
Before the exit, about 60 MSE-listed companies had been allowed to trade on the NSE through an arrangement between the two exchanges, Business Standard reported, naming TTK Healthcare, Amrutanjan and Lakshmi Mills among Chennai names. Around 200 companies were listed only on the MSE.
For companies listed only on an exiting exchange, the 2012 policy provides for a dissemination board run by a national exchange, which keeps their information public and lets shareholders look for buyers. Business Standard reported in 2015 that a private agency had written to shareholders of some MSE companies offering to buy their shares, so treat any unsolicited offer with care.
If you hold physical certificates of such a company:
- check whether the company has since listed on NSE or BSE, using the exchanges’ company search;
- if not, look for it on the dissemination board, and contact its registrar to convert the shares to demat form;
- check the Investor Education and Protection Fund (iepf.gov.in) for unclaimed dividends or shares transferred there.
For anything involving the value or sale of old holdings, consult a SEBI-registered adviser.
Quick answers
When was the Madras Stock Exchange founded?
It was registered on 12 August 1937, after an earlier exchange started in April 1920 faded in the 1920s.
When did it shut?
SEBI permitted its exit on 14 May 2015, after shareholders voted for closure in May 2014.
Why did it close?
It could not meet SEBI’s 2012 norms for regional exchanges, which included ₹100 crore net worth and ₹1,000 crore annual trading.
Can I still sell shares that were listed only on the MSE?
Not on the MSE. Check if the company now trades on NSE or BSE, or use the dissemination board route.
Information checked against official sources on 18 October 2026. Fees, dates and rules can change; confirm on the linked official pages before acting.
Sources
- SEBI press release PR No. 132/2015 on exit of Madras Stock Exchange (SEBI)
- Exit policy for de-recognised/non-operational stock exchanges, circular of 30 May 2012 (SEBI)
- Sebi permits Madras Stock Exchange to exit business (Business Standard)
- 77-year-old Madras Stock Exchange gets shareholders’ nod to close (Business Standard)
- Two anniversaries: 75 years of stock broking, Vol. XX No. 14 (Madras Musings)
