Bombay Stock Exchange Ltd, owner of the Asia’s oldest stock exchange, has set its initial public offering for sale of shares for 23-25 January.
The IPO may be sized at up to Rs 13.5 billion, with the shares being priced at Rs 800-900 apiece, according to various media reports.
BSE ltd recently got the regulator’s approval for the sale of shares.
Earlier December, the company started a spree of investor roadshows to attract people to buy into the issue, in which several existing shareholders plan to sell their equity stake in the company.
If successful, Bombay Stock Exchange will only be the second exchange, and first stock exchange, to be listed in India. Currently, Multi Commodity Exchange, originally promoted by businessman Jignesh Shah, is the only listed exchange in the country.
According to filings, 262 existing shareholders intend to sell 29.96 million shares, representing 27.43% of the pre sale share capital, through offer for sale route in the IPO.
Singapore Exchange Ltd (SGX), which has 4.7% stake in BSE, will sell its entire 4.7% stake to make a complete exit. Another major investor selling its stake includes a Citigroup unit.
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Eight merchant bankers are managing the issue, including Edelweiss Financial Services Ltd, Axis Capital Ltd, Jefferies India Pvt Ltd, Nomura Financial Advisory and Securities (India) Pvt Ltd and SBI Capital Markets Ltd.
Earlier, Indian markets regulator Securities and Exchange Board of India (SEBI) had sought clarifications from BSE Ltd on its draft prospectus, including one about change in face value of shares.
It is projecting itself as the potential beneficiary of India’s increasing domestic savings. Analysts and observers feel that India’s low participation in capital markets presents stock exchanges with huge upside opportunities. Also, government’s push on disinvestment of public sector undertakings has provided Indian bourses a good support. BSE itself has seen a constant rise in listing fees.
However, since several of its current investors are looking to exit their holding in the company themselves, they might need a lot of convincing to get new investors to buy into it, analysts say. Further, the newer bourse National Stock Exchange, which was launched much later, is now much bigger than the BSE, and commands a far larger share of cash trading.
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Bombay Stock Exchange is Asia’s oldest exchange. It was established in year 1875 as the first stock exchange in Aia. BSE has over 5,000 companies listed on it, the highest in any exchange around the world.
The company is professionally managed, and does not have an identifiable promoter, or any single shareholder who controls 15% or more in the company. Individual shareholders such as founding members, traders and brokers, hold 56.83% equity stake in BSE. The remaining is held by institutions such as the Life Insurance Corporation of India, State Bank of India, Bajaj Holdings and foreign bourses.
Billionaire investor George Soros bought 3.9% stake in BSE in 2010 for about Rs 160 crore from Dubai Financial Group, valuing the exchange at about Rs 40 billion.