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BSE plans to divest up to 30% stake via IPO

31 May, 2016

India’s oldest stock exchange BSE Ltd plans to offload up to 30% stake through an initial public offering (IPO) that will comprise an offer for sale by existing shareholders and may include a possible fresh sale of shares, it said in a notice.

The exchange will hold an annual general meeting (AGM) on June 24 to seek approval from its shareholders for the listing, which would make it the first-listed stock exchange in the country. It did not specify the amount it plans to raise.

However, according to a report by Mint, the exchange is likely to raise around Rs 1,300 crore (about $195 million) from the sale before the end of FY2016-17. 

“A combination of an offer for sale and a fresh issue for up to 30% of the post-issue issued equity share capital of the company, subject to regulatory requirements, would be considered at the AGM,” it said.

The exchange, which counts foreign stock exchanges such as Deutsche Boerse AG and Singapore Exchange Ltd among its shareholders, will allow all existing shareholders to participate in the offer for sale, which could lead to a rejig in its shareholding pattern, according to the notice. Deutsche Boerse AG and Singapore Exchange currently hold a 5% stake each.

Foreign investors such as US billionaire George Soros’s hedge fund Quantum’s Mauritius investment arm Quantum (M) Ltd, Canada-based investor Thomas Caldwell’s Caldwell India Holdings Inc and US fund Argonaut Private Equity are also investors in the exchange.

On the other side, its domestic shareholders include Life Insurance Corporation of India, State Bank of India and Bajaj Holdings and Investment Ltd.

Earlier in March, the exchange had received in-principle approval for its share sale from the Securities and Exchange Board of India (SEBI).

BSE had first approached the capital markets regulator SEBI for the listing in January 2013. However, the proposal was not cleared due to lack of clarity on Stock Exchanges and Clearing Corporations (SECC) Regulations 2012 which are aimed at making it easier for exchanges to list.

Following this and based on industry feedback, SEBI issued a notification earlier this year on amendments to the SECC norms, paving way for BSE to list itself.

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BSE plans to divest up to 30% stake via IPO

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