BSE, NSE bring 2,070 stocks under illiquid scrip trading window

The country's top stock exchanges, National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) have announced a list of illiquid stocks that will be traded in hourly call auction window beginning Monday.

The two exchanges are to start their call auction mechanism for illiquid stocks from Monday, following a circular in February from the Securities and Exchange Board of India.

Of the 2,070 stocks that will come under illiquid scrip trading window, 1,807 scrips are BSE-listed and 20 stocks are NSE-listed while 243 scrips are listed on both the exchanges.

While none of the BSE-500 or CNX-500 (barring Bannari Sugars) is in the list, the illiquid list adds up to about a tenth of the stocks on the National Stock Exchange and a little over half of those on the Bombay Stock Exchange.

These stocks will not be available for continuous trade and their trading will be restricted to periodic call auction sessions of an hour each, during which orders will be matched for the first 45 minutes and put through in the final 15 minutes.

The move, which is aimed at curbing market volatility, could create operational difficulties for the bourses.

A stock is classified as illiquid if the average daily trading volume of a scrip in a quarter is less than 10,000 or if the average daily trades is less than 50 in a quarter.