One of the country’s premier stock exchanges, Bombay Stock Exchange, has set up a working committee to process its proposed initial public offering (IPO).
According to Ashishkumar Chauhan, Interim CEO of the “cash-rich” Exchange, said the committee is in the process of preparing a Red Herring prospectus and fine tuning other formalities. “The company may get listed in the first or second quarter of calendar 2013,” he said.
According to him, the idea of IPO is to give an exit route for its existing investors, rather than mobilising funds, and hence “it will be an offer for sale.”
At present, various broking houses hold over 43 per cent stake in the company, followed by institutional investors with close to 40 per cent and the remaining stake is held by some retail investors.
Under the current regulation, BSE needs to dilute up to 25 per cent stake, and the committee will work out an elaborate plan on how to go about this, said Chauhan.
On BSE’s efforts to attract QFIs (qualified foreign investors), he said the exchange encourages and facilitates setting up of offices abroad by broking companies. BSE is the first Indian stock exchange to ring in the first QFI transaction (by a US-based investor) in June. One of its broking houses is now setting up an office in Dubai and is likely to go on stream by September this year.
Talking about BSE’s competitiveness in terms of transaction cost in the futures and options segment, Chauhan said the exchange charges just Rs 50 for every Rs 1 crore transacted in Options. This results in option trading cost on BSE being 85 per cent lower than other exchanges. It does not charge any transaction cost for futures.