BSE gets Sebi nod for IPO launch, may raise Rs1,500 crore

Capital market regulator Securities and Exchange Board of India (Sebi) has approved a proposal by the Bombay Stock Exchange (BSE) for sale of stake through the offer for sale route, enabling the bourse to raise an estimated Rs1,500 crore.

With Sebi giving its final approval for the draft prospectus for the estimated Rs1,500-crore public offer, Asia's oldest exchange has announced the launch of an initial public offer by existing investors.

Under the IPO plan, existing shareholders of BSE will sell 29,955,434 shares, equivalent to 30 per cent of the bourse's equity base, through the offer for sale (OFS) route.

BSE's major shareholders include Bajaj Holdings Investment, Caldwell India Holdings, Acacia Banyan Partners, Singapore Exchange, Mauritius-based arms of American investor George Soros' Quantum Fund and foreign fund Atticus.

The exchange had filed draft papers with the regulator in September to float an IPO and received Sebi's 'observation' on 30 December, which is necessary for any company to launch public offer, the latest update available with Sebi showed.

Sources said the shares could be offered at a price of Rs500 each, giving the IPO a size of up to Rs1,500 crore. At the lower end of the band, the IPO should be worth about Rs1,200-1,300 crore, they added.

There are an estimated 9,000 shareholders in BSE, where originally mostly brokers held shares. However, a host of foreign investors and domestic financial institutions have acquired shares over the years and the IPO will provide some of them an exit opportunity to monetise their assets.

BSE shares will be listed on NSE as Sebi rules do not allow self-listing for an exchange. Rival NSE had filed draft papers with Sebi last week.

The exchange may allocate up to 60 per cent of the QIB portion to anchor investors. One-third of the anchor investor category will be reserved for domestic mutual funds.

Sebi had last year accorded in-principle approval for BSE's stock sale.

The issue is being managed by Edelweiss Financial Services, Axis Capital, Jefferies India, Nomura Financial Advisory and Securities (India) Pvt, Motilal Oswal Investment Advisors, SBI Capital Markets and SMC Capitals.

Nishith Desai Associates is the legal advisor to the IPO while Karvy Computershare is the registrar.

BSE had reported a 40 per cent increase in its consolidated net profit at Rs 52.72 crore for the first quarter to June 2016.

So far Multi Commodity Exchange of India is the only listed bourse in the country.

National Stock Exchange (NSE), India's largest bourse, has filed draft papers with market regulator for an initial public offer, to raise an expected Rs10,000 crore, in what could be the country's biggest listing since the 2010 IPO of Coal India to raise Rs22,400 crore.

The initial public offer will see existing shareholders of NSE offloading 20-25 per cent shares to the public through the OFS route.

The IPO, worth about Rs10,000 crore, would give the exchange a valuation of Rs50,000-55,000 crore, sources said.