The Hindu Business Line : BSE Ltd may rope in strategic investors, weighs IPO option

NEW IDENTITY: The Executive Director & CEO of BSE, Mr Rajinikant Patel, with the Chairman & Chief Mentor of Infosys, Mr N.R. Narayana Murthy, in Mumbai on Friday. - Paul Noronha

Mumbai , Aug. 19

THE Bombay Stock Exchange (BSE), Asia's oldest stock exchange, today transformed itself into a corporate entity from a being a brokers' association.

In its new avatar, BSE Ltd has plans to bring aboard strategic investors and possibly go in for an IPO. In the process of its transformation into a corporate entity, it is obligated to dilute stockbrokers' stake to 49 per cent.

BSE was established as The Native Share & Stock Brokers Association in 1875. It is the first stock exchange in the country to obtain permanent recognition in 1956 from the Government of India under the Securities Contracts (Regulation) Act, 1956.

The exchange is expected to unveil its new business plan in the next one month.

"We can dilute brokers' stake in the BSE either by offering stake to strategic investors or an IPO, or both," Mr Rajnikant Patel, CEO of BSE, told newspersons at a function to announce the change.

As per the BSE (Corporatisation and Demutalisation) Scheme 2005 notified by the SEBI, the exchange has to bring down brokers' stake to 49 per cent in the next one year from 100 per cent.

Currently, BSE has paid-up capital of Rs 75 lakh with each share having a face value of Re 1.

Mr Patel said that 10-12 investment bankers have already given a presentation to the exchange for IPO.

"We have seen the presentation and till now no decision has been taken. Until we have any concrete business, it will be difficult to go for an IPO. We have become a corporate entity just now, and will take time to decide on what kind of investors we can rope in."

The BSE would also look at various other businesses other than stock trading.

"It could be entering into financial services business and any other business," said Mr Patel, adding that the exchange will take the help of consultants for it.

The Chief Mentor of Infosys Technologies, Mr N.R. Narayana Murthy, who was the chief guest at today's function, urged the BSE to adhere to the highest level of corporate governance.

"Companies which are listed on the BSE abide by corporate governance and disclosure, but BSE should have much higher standards than the companies traded on the exchange," he said.

He also advised the exchange to find out the best practices of leading international stock exchanges such as Nasdaq, NYSE, and London Stock Exchange and adopt them.

New-look Web site

The newly corporatised BSE Ltd has also made changes to its much accessed Web site. Regular users were surprised when the new format downloaded after close of trade on Friday.

While the data about stock movements and intra-day prices are presented in the regular format, the homepage is completely different. The list of BSE indices has shifted positions as also the menu on the left hand side. Now, tabs hang from the top and bottom of the page.

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BSE Ltd may rope in strategic investors, weighs IPO option