BSE Gears up For India’s First IPO By a Stock Exchange on January 23-25

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The Bombay Stock Exchange, or the BSE, the country’s second-largest stock exchange, said today it is planning to hit the market via an Initial Public Offering (IPO) on January 23 to 25. Analysts and bankers suggest that the listing would raise an amount ofRs 1,350 crore or $198 million.More than 300 shareholders in the BSE, including Singapore Exchange and a Citigroup unit, will sell up to 15.4 million shares with a face value of Rs. 2 each, as stated in its red herring prospectus filed with the regulatorSEBI. This development comes in the face of the largest exchange, theNational Stock Exchange or the NSE, filed for an IPO last month which is said to raise as much as about Rs 6,800 crore or $1 billion.

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BSE currently has302 shareholders of which the above-mentioned units hold major shares. The Singapore Stock Exchange holds a 4.67 percent share, the George Soros-promoted Quantum fund holds 3.68 lakh shares while Atticus Mauritius holds 3.68 percent of the shares. All three major shareholders will sell their entire holdings in the exchange. On the other hand, the Deutsche Brse Group, which holds a 4.7 percent stake in the stock exchange, will not sell its shares. The Singapore Exchange and the Deutsche Brse Group each had earlier acquired a 5 percent stake in the stock exchange for a sum of Rs 200.78 crore in 2007. The reason why the shareholders are selling off their stakes is not known at this moment.

Interestingly, the BSE shares will be listed on its arch rival NSE. When the NSE filed for its IPO last month, SEBI had given consent on January 3, completing a process that lasted nearlyfour months after BSE filed the papers with the market regulator back on September 9. Earlier, SEBI had approved CDSL, or theCentral Depository Services Limited, which is the second Indian central securities depository based in Mumbai, to file for an IPO. CDSL also holds a 54.2 percent share in the BSE. The BSE has seen steady growth in recent years with average daily trading volume rising to 407.5 million from 323.5 million between the financial years 2012 to 2016, as stated in this report. The fellow stock exchange NSE too has seen a steady increase in transactions.

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