MUMBAI: Asia's oldest stock exchange, BSE, will soon become the first equity bourse of the country to go public.
The initial public offer (IPO) of the exchange will open on January 23 wherein a total of 1.54 crore equity shares would be offered to the public in the price band of between ₹805 and ₹806.
The offer size is nearly Rs. 1,244 crore at the upper end of the price band.
The offering will allow individuals and institutions to own a slice of the exchange that was established on July 9, 1875. Currently, Multi Commodity Exchange of India (MCX) is the only listed entity in the exchange space. Meanwhile, the National Stock Exchange (NSE) is also in the process of going public.
According to the IPO prospectus filed by BSE, more than 300 entities — individuals, brokerages, institutional investors, exchanges — are selling their shares as part of the BSE IPO. Since the IPO is an offer for sale by existing shareholders, the exchange will not receive any IPO proceeds.
Singapore Exchange, along with some of the other top shareholders like Atticus Mauritius, Caldwell India Holdings Inc, Acacia Banyan Partners and GKFF Ventures plan to sell their shares in the forthcoming initial public offer (IPO) of the exchange.
Singapore Exchange to exit
According to the red herring prospectus of the exchange, Singapore Exchange, which owns currently 4.67 per cent stake in BSE, will be completely exiting from the Indian bourse. Quantum (M) and Atticus Mauritius will also sell their entire stake in the bourse, while many other entities would partly dilute their holdings.
Both, Quantum (M) and Atticus Mauritius have 3.7 per cent stake each in BSE, as per the IPO document. Among the top 10 shareholders of BSE, only Deutsche Borse, which 4.75 per cent stake, has decided against diluting its holding in the exchange.
Domestic institutional investors like State Bank of India (SBI) and Life Insurance Corporation of India (LIC) have chosen not to sell any shares as part of the public issue. While SBI has a stake of 4.75 per cent stake in BSE, LIC owns 4.68 per cent.
The exchange has been maintaining a steady bottom-line over the years though it has been facing stiff competition from its larger rival, NSE, which has a near monopoly in the equity derivatives segment and a dominant position in the equities space.
For the financial year ended March 31, 2016, BSE reported a net profit of ₹159.15 crore. In FY15 and FY14, the net profit was ₹151.35 crore and ₹159.44 crore, respectively.
For the public issue, the exchange has brought on board leading investment bankers, including Nomura, Axis Capital, Edelweiss, SBI Capital Markets and Motilal Oswal Investment. The IPO will close for subscription on January 25.
