MUMBAI, July 15: The Inter-Connected Stock Exchange of India Ltd (ICSE) being floated by 12 regional stock exchanges is expected to be the most cost-effective among all the exchanges in the country.

A cost-benefit analysis of the proposed exchange reveals that the estimated cost of operations will be Rs 15.50 for every one lakh rupees turnover for the year 1998-99 as compared to the very high costs of Rs 89.18 per lakh for the regional stock exchanges, Rs 71.40 for the National Stock Exchange and Rs 63.80 lakh for the Bombay Stock Exchange incurred in the year 1995-96.

The rationale behind this expectation of low cost is that the operating costs have already been borne by the regional bourses in the form of infrastructural costs. ISESC will need to bear only the incremental costs. Even this cost per unit turnover is anticipated to decrease following the high volumes expected by the exchange in the inter-connected market. The inter connected stock exhcange aims to make optimal utilisation of the existing infrastructure in terms of the clearing house and surveillance systems, to ensure maximum liquidity to the stocks listed on these regional exchanges. Besides, all technical costs like that of the Vsat connection have reduced substantially this year as compared to the previous years.

The exchange has projected a relatively low income of Rs 16.50 per lakh turnover compared to the other exchange. ISESC will lose out on earning listing fees or any other income from the companies, since it will permit trading on the inter connected market system (ICMS) only in those companies which are already listed on the regional exchanges. The income will mainly comprise of the income generated from the turnover and the interest on the security deposits and various other deposits kept by the various members with the exchange. ICSE has projected a turnover of Rs 34,500 crore for 1998-99 as compared to total turnover of Rs 16,617 crores which has been collected by all the 12 regional exchanges put together for the year 1995-96. The proposed exchange made a formal presentation to Sebi on Monday, bringing out the business potential alongwith the benefits that an investor on the ICSE would have.

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