Asia’s oldest stock exchange BSE Ltd has received market regulator Securities and Exchange Board of India (Sebi)’s go-ahead for its initial public offering (IPO), according to the regulator’s website.
The exchange had filed its draft red herring prospectus (DRHP) in September.
Last week, BSE’s larger rival National Stock Exchange of India Ltd (NSE) too filed its DRHP with the regulator. Existing investors of NSE are looking to dilute 22.5% stake through the IPO, which could be as large as Rs10,000 crore.
The BSE issue size is estimated to be Rs.1,200-1,300 crore, Mint reported in September.
Existing shareholders of Asia’s oldest bourse intend to sell 29.96 million shares through the offer for sale route, according to the information in the draft prospectus. The issue represents 27.43% of BSE’s pre-share sale capital.
The draft document listed 262 shareholders who have agreed to sell their shares. Singapore Exchange Ltd (SGX) will sell 5.09 million shares, or a 4.7% stake, making a complete exit.
Other shareholders who have offered to sell their shares include Atticus Mauritius Ltd, Mauritius investment arm Quantum (M) Ltd, GKFF Ventures, Acacia Banyan Partners Ltd, Canada-based investor Thomas Caldwell’s Caldwell India Holdings Inc., and Bajaj Holdings and Investment Ltd.
BSE has hired eight merchant bankers, 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.
Exchanges will be an exciting new space for investors, said Prithvi Haldea, chairman of Prime Database group, a primary market tracker.
“Despite the sheer population of the country, the number of people participating in the capital markets is very low. This participation is only going to increase going ahead and that will boost the exchange business,” he said.
The government too is keen on increasing the retail participation in capital markets, he said. New products and innovations such as real estate investment trusts (REITs) and infrastructure investment trusts (InvITs) will also help, he said.
“The government’s focus on divestments is another positive for the exchange business as it will bring more retail investors to the table. With new products such as REITs/InvITs coming to the markets, the exchange business will grow further. Also, once the start-up platforms gain traction and new-age companies cone to the market, that too will be a positive for the business,” he added.
Individual shareholders, mainly brokers and trading members, hold 56.83% in BSE. The rest is held by institutional holders such as the Life Insurance Corporation of India, State Bank of India and Bajaj Holdings, besides the foreign bourses.
In 2010, when billionaire financier George Soros bought a 3.9% stake in BSE for about Rs160 crore from Dubai Financial Group, the exchange was valued at around Rs4,000 crore.
Currently, Multi Commodity Exchange of India Ltd is the only listed bourse in the country.
Last year saw 26 companies raise Rs26,493.8 crore through the IPO route, according to data from primary market tracker Prime Database, while in 2015, 21 companies raised Rs13,614.08 crore.