The Hindu Business Line : Demutualisation: DSE gets 7 ‘expression of interest’ letters

As many as seven parties, including foreign asset management companies have expressed interest in picking up a stake in the Delhi Stock Exchange (DSE), which is one of the oldest stock exchanges in the country. The expression of interest (EOI) letters from eight more parties is expected over the next few days, a top DSE official said.

“We have till date received seven EOI letters. The documents are being prepared and we will forward the names to SEBI soon. We had a meeting with our merchant bankers. Eight more EOI letters are in the pipeline,” Mr Bharat Bhushan Sahny, Chairman, DSE Demutualisation Committee, told BusinessLine.

Mr Sahny said that the DSE board met here on Saturday and took note of the seven EOI letters that have been received already. He, however, declined to name the parties that have shown interest in participating in the demutualisation process. All bids were required to be submitted by June 30.

Demutualisation exercise

DSE has to comply with the demutualisation scheme by August 28. According to the DSE’s advertisement inviting EOI, there are around 3,000 companies listed with the exchange, out of which around 1,800 companies are exclusively listed with DSE.

The demutualisation exercise seeks to ensure induction of non-trading shareholders to the extent of 51 per cent of the aggregate equity capital of the exchange post-demutualisation.

The current strength of DSE board is 17. After demutualisation, the board will comprise 50 per cent directors representing share owners other than the trade owners.

While 25 per cent will be from trading members to be elected by shareholders, the remaining 25 per cent will be public interest directors appointed by shareholders out of list of independent directors to be provided by SEBI.

‘No extension’

A team from SEBI had recently visited DSE and held meetings with the representatives of the regional stock exchanges in North India to review the progress of the demutualisation schemes approved for those exchanges. SEBI had made it clear to the exchanges that there would not be any further extension on the timeline for complying with the demutualisation schemes.

DSE had on May 29 issued advertisement inviting interested parties to submit their ‘expression of interest’ to participate as investors, with each investor acquiring (either individually or as a consortium) a maximum of 5 per cent.

Prior approval of SEBI would be required for such investments. However, no approval is required if the participating investor intends to acquire up to 1 per cent of equity shares of DSE.