The proposed merger was expected to enhance trading volumes and attract more international investors to GIFT City, where the average daily turnover on these exchanges runs into billions of dollars. However, the talks which had been going on since 2022 failed to make any headway, leading to the BSE pulling the plug.
"The merger was driven by the IFSCA's (International Financial Services Centres Authority) objective of making GIFT City a global financial centre rivalling Singapore, Hong Kong, Luxembourg and Dubai. The talks having ended are a setback to that goal," said one of the sources.
The BSE confirmed that the merger discussions are now "off the table" but declined to comment further on the reasons behind the decision. Attempts to get a statement from the NSE were unsuccessful.
India INX, launched in January 2017, was the first international exchange to begin operations at GIFT City, while NSE IX followed a few months later in June 2017. The two bourses had given in-principle approval for the merger in the second half of 2022 amid key leadership changes.
NSE IX dominates the market at GIFT City with a 95% share, recording a turnover of $116.08 billion in the current fiscal year so far (April 1 to May 22). India INX holds the remaining market share.
Another source stated that despite the rivalry between NSE and BSE in domestic markets, the GIFT City regulator had viewed the merger favorably as it would strengthen India's bid to become a global financial hub. "The merger talks failing are a disappointment," the source added.
