MSEI: Weak Operations Despite Rs 1200 Cr. Funding

Metropolitan Stock Exchange of India (MSE) is a recognized national-level exchange offering a technology-driven platform for trading in equities, currency derivatives and debt instruments. However, despite multiple rounds of capital strengthening and infrastructure upgrades, MSE’s operational performance continues to remain weak.

The exchange’s latest financial results indicate that trading activity is still muted, and the improvement seen is driven largely by investment income rather than business operations.

Half-Year Financial Performance (H1 FY25-26 vs H1 FY24-25)

Indicator	H1 FY25–26 (Rs Cr)	H1 FY24–25 (Rs Cr)	% Change
Revenue from operations	1.81	1.95	-7.18%
Total income	20.53	8.01	+156.31%
Total expenses	32.06	25.17	+27.37%
Loss before tax	-11.53	-17.16	Loss improved by 32.80%
EPS (Rs)	-0.01	-0.04	Improved

Key Takeaways:
• Revenue remains weak despite multiple capital infusions.
• Total income surged mainly due to increased financial income, not trading activity.
• Operating losses narrowed but the business still lacks profitability.

Quarterly Snapshot (Q2 & Q1 FY25–26)

Indicator	Q2 FY25–26 (Rs Cr)	Q1 FY25–26 (Rs Cr)	% Change
Revenue from operations	0.86	0.95	-9.47%
Total income	14.08	6.45	+118.29%
Total expenses	18.17	13.88	+30.09%
Loss after tax	-4.09	-7.43	Loss reduced by 44.94%

Key Takeaways:
• Revenue from operations fell further, indicating ongoing low trading volumes.
• Total income growth came from treasury gains.
• Cost base continues rising due to tech and personnel expenses.

Cash Flow Analysis

Indicator	Amount (Rs Cr)
Operating cash flow	-65.01
Investing cash flow	-951.79
Financing cash flow	+999.04
Net change in cash	-17.76

• Heavy investment spending and negative operating cash flow show business strain.
• Financing inflows are keeping liquidity stable, not operations.

Operational Reality

Despite raising more than Rs 1,200 crore, MSE’s trading activity remains stagnant. Employee costs (Rs 10.52 Cr) and administrative expenses (Rs 6.88 Cr) reflect the fixed cost burden of running a regulated exchange even when operational volumes are low.

The exchange continues to operate in a subdued environment with little improvement in core revenue, demonstrating that funding alone has not translated into operational revival.

Looking Ahead

MSE’s strong capital base provides resilience, but the real challenge remains increasing trading participation. The upcoming quarters will show whether the exchange’s structural investments result in meaningful operational recovery. For now, financial gains are largely investment-driven while core exchange operations remain under pressure.