By Anirudh Singla
Asias oldest bourse, Bombay Stock Exchange (BSE) is all set to initiate its much-awaited Rs. 1,500 crore Initial Public Offering (IPO) on January 23. BSE filed the papers with SEBI (Securities and Exchange Board of India) on September 9 and the market regulator gave its nod to the IPO on January 3. SEBIs approval has come at a time when CDSL, a BSE arm (54.2 per cent held by the exchange), has also filed for an IPO. According to the Red Herring Prospectus, the IPO will open on January 23 and eventually close on January 25.
Opening its doors
Through the traditional Offer for Sale (OFS) route, the IPO should see a sale of about 1.54 crore shares by the existing shareholders.
Prominent shareholders include the Singapore Exchange, Acacia Banyan Partners and foreign fund, Atticus. In a recent announcement, the BSE set the IPO price band at Rs. 805-806 per share. The IPO will see some of BSEs shareholders selling a total agglomerate of 1.54 crore shares and will value the stock exchange at Rs. 4,400 crores at the top end of the price range.It will be interesting to see how this will affect the supposed competition between the BSE and the National Stock Exchange (NSE). It is being widely speculated that the shares will be listed on rival NSE on or around February 3.
Dreaming big
[su_pullquote]With acquisitions by foreign investors and domestic financial institutions over the years, the turf is no longer as secure as it used to be.[/su_pullquote]
With about 9,000 shareholders in its troupe, BSE was an institution in which most brokers held shares. However, with acquisitions by foreign investors and domestic financial institutions over the years, the turf is no longer as secure as it used to be. The upcoming IPO will provide them an exit opportunity to monetize their assets. Furthermore, BSE is aiming to win market share from financial hubs such as Singapore and Hong Kong, and especially from its national counterpart – NSE.
BSE is aiming to win market share from financial hubs | Picture Courtesy – Wise GeekAccording to its Chief Executive, Ashish Chauhan, BSE will achieve this goal by investing in technology and offering round-the-clock trading service sat its new exchange in Gujarat. The International Exchange will trade a range of financial instruments including equities, commodities and currency in Gujarats International Financial Tec-City (GIFT), which was created to attract more foreign investment. With the goal of becoming one of the fastest, if not the fastest, exchanges in the world by offering a response time of four microseconds, it sure looks like BSE is all set to take up.