The LSE acquired Sri Lanka's MillenniumIT for around £18 million in 2009 to replace its own outdated, slow systems.

The acquisition was also designed to provide a new revenue stream, with the bourse seeking to follow rivals Nyse Euronext and Nasdaq OMX, and hawk the technology to exchanges around the world.

The Delhi deal is MillenniumIT's latest contract win since it was taken over, following contracts with Oslo Børs and the Johannesburg and Mongolian stock exchanges.

Financial details have not been disclosed but according to the Financial Times, citing sources, the LSE could be given the option to take a five per cent stake in its counterpart.

In addition, Hirander Misra, the former Chi-X Europe COO who over the summer quit Algo Technologies, the fintech vendor he helped set up, is in the frame to lead a revamped DSE, says the FT.

Commenting on the contract win, Tony Weeresinghe, CEO, MillenniumIT, says: "India is a dynamic and fast developing market and we look forward to working with the Delhi Stock Exchange to introduce a high-speed, low-cost trading solution to the Indian market."