Indian stock markets will create history of sorts by the end of next week, as almost all regional stock exchanges (RSEs) will be demutualised. The deadline set by the Securities & Exchange Board of India (Sebi) for the second and the last set of stock exchanges to complete their demutualisation process comes to an end on September 14, 2007. Up until now, ten bourses, including the BSE, have successfully achieved divested a majority stake in favour of public shareholders.
The exchanges that will be completing their demutualisation process by next week include Ahemadabad, Vadodara, Jaipur, Ludhiana, Bhubaneshwar, Magadh and the Inter-Connected Stock Exchange. The nine exchanges that achieved demutualised status recently are Madras, Kochi, Bangalore, Madhya Pradesh Stock Exchange, Pune, UP Stock Exchange, Guwahati, Delhi and Calcutta. The BSE was the first to attain this status in May 2007. The only exchange that cannot meet the Sebi deadline among the nine others is Hyderabad Stock Exchange, whose recognition now stands cancelled under the provisions of SCRA.
Interestingly, most of the investors in RSEs are individuals and very few corporates. BSE is the only exchange that has picked up 5% stake in the Calcutta Stock Exchange. No other exchange has managed to attract a national-level bourse as its investor. The move by NSE to hold 5% in Delhi Stock Exchange was rejected by Sebi, informed sources told FE.
Rajnikant Patel, CEO & managing director, BSE said, ?The BSE has picked up 5% stake as a strategic partner in Calcutta SE. We have signed an MoU for the revival and growth of CSE and its members. We believe that the BSE-CSE combination presents a good business opportunity for the members of both.?
A sources also said, ?Corporate investors are well informed, as their investment decisions are guided and guarded by slew of legal and professional advisors. Most of the individual investors that have picked up stakes in RSEs are actually eyeing the huge land banks owned by the exchanges. Riding the boom in the real estate sector, they are hopeful that this will benefit the exchange and will raise the valuation of their stake, too.?