BSE Ltd, formerly Bombay Stock Exchange, is targeting its initial share sale in the third or fourth week of January, two people familiar with the matter said.
The operator of Asia’s oldest bourse has completed investor roadshows in Singapore, Hong Kong, London and New York, and will start domestic roadshows this week, the people said, asking not to be named.
The IPO comprises a sale of 29.95 million shares, or 27.43% pre-offer equity, and is estimated to be around Rs 1,500 crore ($225 million). This would value BSE at roughly Rs 5,500 crore, said one of the persons cited above.
“We are targeting the launch of the IPO in the third or fourth week of January. Domestic roadshows will begin now to gauge investor feedback before we finalise the pricing and launch dates,” the person said. BSE received clearance for the IPO from the Securities and Exchange Board of India on 30 December, according to the SEBI website.
An email query sent to BSE did not yield any response by the time of publishing this article.
Last week, Business Standard had reported that BSE might float the IPO in early January.
BSE will be India’s second bourse to go public, after Multi Commodity Exchange of India (MCX) Ltd listed its shares five years ago.
BSE’s larger rival, National Stock Exchange, is also working to go public. The two exchanges will list on each other’s platforms.
NSE last week filed draft papers for an IPO that would involve a sale of shares by shareholders including Tiger Global Holdings, Temasek Holdings, Goldman Sachs Inc., Citigroup and State Bank of India. The share sale is estimated to be worth Rs 10,000 crore and could value NSE around Rs 44,450 crore ($6.6 billion).
BSE had received shareholders’ nod for the IPO on 24 June last year and filed its draft proposal with SEBI on 9 September. The public issue will allow Singapore Exchange Ltd and US billionaire George Soros’s hedge fund Quantum to exit BSE.
As many as 262 shareholders of the total 9,855 shareholders have offered to sell their shares. Singapore Exchange—which holds a 4.75% stake—and Quantum’s Mauritius investment arm, Quantum (M) Ltd, will fully exit. Several other foreign investors, domestic institutions and many individuals will sell all or some of their shares, according to information made available in the draft prospectus.
The notable names missing from the list of selling shareholders include Deutsche Boerse AG as well as state-run Life Insurance Corporation and State Bank of India, who all hold a 4.75% stake each in BSE.
BSE reported consolidated net profit of Rs 48.34 crore for the three months ended June 2016 on consolidated revenue (operations) of Rs 113.02 crore. For 2015-16, it reported a net profit of Rs 159.15 crore on revenue of Rs 426.54 crore.
BSE, founded in 1875, had been considering an IPO for a long time but its plans were delayed due to a lack of clarity on rules for the listing of stock exchanges.
The exchange had first approached SEBI in January 2013 to list its shares. However, the proposal was not cleared due to lack of clarity on Stock Exchanges and Clearing Corporations (SECC) Regulations 2012.
Based on industry feedback, SEBI issued a notification last year on amendments to the SECC norms, paving the way for BSE to list itself. SEBI gave its in-principle approval to the BSE for an IPO in March.
BSE has appointed Edelweiss Financial Services Ltd, Axis Capital Ltd, Jefferies India Pvt Ltd and Nomura Financial Advisory and Securities (India) Pvt Ltd as lead bankers. Motilal Oswal Investment Advisors Pvt Ltd, SBI Capital Markets Ltd, SMC Capitals Ltd and Spark Capital Advisory (India) Pvt Ltd are the other bankers.
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