Shares of Financial Technologies (India) Ltd slumped 43 percent after National Spot Exchange Ltd, a commodities exchange in which it owns a substantial stake, suspended trading in its one-day forward contracts till further notice.
The federal government had earlier asked the spot exchange not to launch new contracts, creating uncertainty among traders, the NSEL said.
"This abrupt action has created uncertainty and doubt about continuity of trading on the Exchange and hence most of the participants started withdrawing from the market," NSEL said in a statement.
The exchange also decided to merge the delivery and settlement of all pending contracts and deferred it for a period of 15 days.
The exchange said its "e-series" contracts, through which investors can buy and sell commodities in demat form, will continue to be traded and settled.
The spot exchange clocked an annual turnover of 6 billion rupees ($100.24 million) in the year to March 2013, and had 67 running contracts on the exchange, with sugar and rice contributing to most of its volumes.
Financial Technologies shares fell as much as 43 percent, slumping to their life low of 307 rupees. As many as 5.2 million shares had changed hands by 0442 GMT - over twenty times the stocks' average daily volume. Shares in Multi Commodity Exchange of India, another FT-promoted company, were down 14.63 percent at 544.80 rupees.