The Metropolitan Stock Exchange (MSE) is making a comeback. Powered by an upgraded engine and backed by more than Rs 1,200-crore from fintech investors, MSE aims to challenge the duopoly of the National Stock Exchange (NSE) and BSE.
After a long break, MSE resumed trading on January 27. Building on this momentum, MSE will hold a special trading session on February 1, to coincide with the presentation of the Union Budget 2026.
“A relaunch typically reflects upgraded systems, improved governance, increased transparency, and renewed efforts to rebuild trust and relevance in the market. The process involves fixing previous system flaws to meet present market requirements instead of creating an entirely new system,” said Piyush Jhunjhunwala, CEO & Founder, Stockify.
Founded in 2008, the MSE launched its currency derivatives segment on October 7 that year. Originally called MCX-SX, it was rebranded in 2015 and subsequently gained recognition from the Securities and Exchange Board of India (SEBI) to operate in multiple segments, including currency derivatives, debt securities, equities, and equity derivatives
A lot has changed since MSE’s earlier avatar. Digital infrastructure has improved dramatically and regulatory framework is far stronger, which, along with a growing economy, have seen a huge growth in investor base.
Were investors aware of it earlier?
Investor awareness was poor as financial literacy stayed low and marketing efforts failed. Retail investors, who depended on traditional brokerage services and major stock exchanges, paid little attention to other trading platforms.
In the past, information was distributed through slow methods that relied mostly on physical channels. Investors now use social media platforms and financial applications together with online news websites and digital marketing campaigns to discover investment opportunities, Jhunjhunwala said. Both regulators and institutions work together to support programmes that educate investors. Public awareness has increased through the efforts of organisations that set up platforms that citizens can access, he said.
Limitations and the scope
With fewer listed companies and products, investors may find it difficult to build a diversified portfolio on MSE compared with what is available on NSE or BSE.
One major concern is liquidity. The MSE trading platform experiences lower trading activity because its market participants buy and sell securities less frequently than they do on bigger platforms. The situation creates challenges for investors who want to buy or sell assets because they must deal with price changes, which can result in financial losses without warning
Ankur Punj, MD and Business Head, Equirus Wealth, said, “With a limited universe of listed companies, diversification options are narrower, and trading volumes tend to be thinner, which can increase volatility and make exits challenging during stressed market conditions.”
Jhunjhunwala said the current issue involves two main aspects. The existence of stock trading on smaller exchanges needs to be understood because it results in reduced research coverage from analysts, institutional investors, and financial media outlets for those stocks that trade on every actively traded market.
“Retail investors have limited access to reliable information, making it difficult to assess a company’s true value and economic position. The information gap leads to decisions that rely more on guesswork instead of trustworthy fundamental data,” he said.
Companies that operate on these platforms sometimes are in earlier development stages because they fail to fulfil the strict requirements needed for listing on larger exchanges. The situation creates new possibilities but increases the likelihood of governance problems and inconsistent business disclosures, thereby, raising operational threats to the organisation.
“The major exchanges provide better security for investors because they establish stricter rules and offer more financial resources and superior investor safeguards. The MSE platform supports specific trading strategies and short-term market movements, yet it does not function as an effective platform for building long-term financial assets,” Jhunjhunwala said.
According to the experts, MSE can still be relevant for sophisticated investors who understand liquidity risk and are willing to take selective, long-term exposure to specific companies.
“The present day shows a distinct change compared to the previous period. The previous period had limited participation because there were only a few registered companies and the market had low trading activity and weak trading capacity. Businesses showed a preference for established markets because these platforms provided better visibility and increased investor trust,” said Jhunjhunwala.
More companies, especially SMEs and startups, are entering the capital market. Digital onboarding, faster compliance processes and simplified listing procedures have resulted in increased participation. “Investors now possess improved access to data and analytics and real-time information, which leads to better decision-making. The market has progressed toward greater inclusivity, transparency, and competitive business practices,” experts said.
Should retail investors dive into the MSE trade
Retail investors looking to build long-term wealth are being urged by experts to think carefully before placing bets on the Metropolitan Stock Exchange, as concerns about its scale, liquidity, and ability to compete with the NSE and the BSE remain.
Kranthi Bathini, Equity Strategist at WealthMills Securities Pvt Ltd, said, “In the equity space, we already have very strong and well-established players, with NSE as the clear market leader and BSE in second place. At this stage, the scope for a third exchange is very limited.”
Bathini said the MSE is not new, it was earlier known as MCX-SX and has only changed its name. Winning back investor confidence will take time and it will be crucial.
There is some speculation in the unlisted space because of valuations but NSE has a very strong presence and steady cash flows. “For MSE, increasing its market presence and trading volumes will be crucial. This is a high-risk option and is suitable only for investors with a high-risk appetite,” said Bathini.
For those focused on steady wealth creation, established exchanges continue to offer deeper markets, better liquidity and stronger investor protection. Until MSE proves it can attract large volumes and listings, caution is likely to remain the wiser course.
“For most retail investors, however, larger exchanges offer a more stable and transparent ecosystem that is better suited to systematic wealth creation,” Punj said.