The corporatisation or demutualisation process was to have been completed by May 19 as mandated by the Securities and Exchange Board of India.
MUMBAI: The Bombay Stock Exchange, Asia's oldest, on Friday completed a nearly two-year exercise of corporatising itself by offloading 51 per cent of broker members' stake to 19 investors including SBI, LIC and Aditya Birla group, besides Deutsche Borse and Singapore Exchange.
The corporatisation or demutualisation process was to have been completed by May 19 as mandated by the Securities and Exchange Board of India under the BSE (Corporatisation and Demutualisation) Scheme, 2005.
Before the demutualisation, 790 broker members held 100 per cent stake in the 131-year-old exchange.
Bennett Coleman & Co, publishers of the Times of India, and Caldwell and Atticus Capital are among the 19 who have picked up stake in the bourse, market sources said, without giving details of the holdings of individual investors.
These 19 investors have picked up 41 per cent stake and the remaining 10 per cent was sold to Deutsche Borse and Singapore Exchange (SGX), who picked up five per cent each for Rs 189 crore at Rs 5,200 per share earlier this year.
The market capitalisation of the BSE now stands at around USD one billion.
Among the 19 new investors are "pedigreed marquee domestic and overseas institutions as well as select domestic corporates and HNIs," the BSE said in a statement.
When contacted, a BSE spokesperson said that due to a confidentiality clause in the agreements with the investors, the names of the 19 new investors could not be disclosed.
"This is reflective of the strong global interest in the Indian capital markets," the BSE said in the statement.
T V Raghunath, Executive President, Investment Banking, Kotak Mahindra Capital Company, which was the exclusive financial advisor to the demutualisation process, said that a total of USD 500-million was collected through the stake sale.
"Twenty per cent of this money has gone into the company while the balance has been paid to the selling shareholders which means around Rs 440-crore and Rs 1,600 crore respectively," Raghunath said.
He also refused to name the investors nor the stakes taken by them in the bourse.
BSE's Managing Director and CEO Rajnikant Patel said that "the successful completion of the demutualisation scheme represents a watershed event in the history of the BSE."
"With the new ownership structure in place, the BSE is well-poised to pursue growth opportunities aggressively."
Present regulations put a five per cent cap on investment by any one single entity while there are 26 per cent and 23 per cent caps on FDI and FII investments respectively.
"With this transaction, FDI investments are complete," Raghunath said, adding that "FII will come into play only after the BSE goes in for its IPO."
The BSE is keen to develop new business opportunities in a tie-up with the two overseas stock exchanges. Deutsche Borse enjoys global leadership position in derivatives trading in which presently, market sources say that the BSE is losing out to its rival, the National Stock Exchange of India (NSE).
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