MSE (Metropolitan Stock Exchange) to Restart Trading Feb 1, Challenging NSE & BSE

Budget Day Restart

MSE will remain open for trading on February 1, 2026, which falls on a Sunday due to the Union Budget session. NSE and BSE will also hold special trading sessions that day. This move gives MSE symbolic visibility on one of the most significant days for Indian markets.

Trading to Begin With 130 Stocks

Reports indicate that MSE will restart live trading from January 27, beginning with around 130 stocks. Both the Equity and Equity Derivatives segments will be active. Trading hours will match those of NSE and BSE, with a pre-open session from 9:00 AM to 9:15 AM and continuous trading from 9:15 AM to 3:30 PM. Clearing and settlement will be handled by Metropolitan Clearing Corporation of India (MCCIL), its dedicated subsidiary.

A Duopoly That Won’t Be Easy to Break

India’s capital markets are heavily concentrated. NSE commands approximately 90–92% of cash market volumes, while BSE holds 8-10%. In derivatives, NSE’s dominance is even higher at around 95%. Such deep concentration creates high barriers for new exchanges, primarily due to liquidity and investor preference for established platforms.

Liquidity Enhancement Scheme (LES)

To address liquidity concerns, MSE is rolling out a Liquidity Enhancement Scheme (LES). Under this scheme, the exchange will appoint market makers who will continuously provide buy–sell quotes, ensuring that traders are not stuck with unexecuted orders. To attract early participation, transaction costs may be subsidised or waived. This mechanism is designed to build confidence and trading depth during the exchange’s initial months.

Why MSE Chose to Scale Now

Fresh Capital and Strategic Backers

MSE has raised ₹1,240 crore through funding rounds in December 2024 and August 2025. The investments came from major market players such as Groww (via Billionbrains Garage Ventures) and Zerodha (via Rainmatter Investments). These platforms control a large share of India’s retail investor base, giving MSE both financial backing and distribution reach.

Regulatory Window of Opportunity

SEBI’s new rule to allow only two weekly derivatives expiries has created room for a third exchange to offer products without clashing directly with NSE and BSE. This gives MSE an opening to design unique expiry products and attract derivatives traders.

Pending Competition Case Background

MSE, previously known as MCX-SX, once accused NSE of predatory pricing in the currency derivatives segment. The Competition Commission of India ruled in MSE’s favor. A potential settlement ahead of a future NSE listing could provide MSE with additional financial support, further strengthening its position.

Major Challenges Ahead

While MSE enters with momentum, several challenges remain:

• Liquidity sustainability: LES incentives are temporary.
• Trader inertia: Retail and institutional traders may stick to platforms with guaranteed depth.
• Ecosystem dominance: Brokers, algorithms, data providers, and institutions heavily depend on NSE infrastructure.
• Competitive response: NSE and BSE may counter with their own schemes and new products.

If liquidity drops after subsidies end in June 2026, MSE risks becoming a niche platform instead of a mainstream competitor.

Significance of February 1

Reopening on Budget Day provides MSE with:

• High visibility among traders
• Potential surge in volumes
• A real-time stress test of market infrastructure

A successful budget-day session could accelerate broker onboarding and investor interest.

Conclusion

MSE’s comeback marks the most serious attempt in decades to challenge India’s two-exchange system. With capital backing, liquidity support, and regulatory shifts in its favour, the stage is set for MSE to grow. However, sustained liquidity, trader adoption, and differentiated offerings will determine whether MSE emerges as India’s third national exchange or remains a marginal player.

The next 6–12 months will be critical in shaping that outcome.