CSE completes demutualisation

The Bombay Stock Exchange (BSE), K K Birla group company Texmaco, B K Birla group's flagship Kesoram Industries, Patton India were among 25 investors who picked up a 52 per cent stake in the Calcutta Stock Exchange (CSE) today, wrapping up the bourse's demutualisation process.

The CSE issued 3,21,750 shares to the investors today, which happened to be the last day of the Securities Exchange Board of India's (Sebi's) deadline to complete the demutualisation.

"We received an overwhelming response, with our offer getting oversubscribed. Hence we accommodated all the bidders by allocating them shares on a pro-rata basis," said T K Das, the administrator of the CSE.

As a result of the pro-rata allotment, the BSE would be holding the largest stake at 4.99 per cent. West Bengal Infrastructure Development Finance Corporation, Emami and Hindustan National Glass are the other major investors in the stock exchange.

The CSE had issued the shares at Re 1 face value priced at Rs 2,000 each, valuing the allotment at Rs 64.35 crore. Post-demutualisation, the brokers' holdings in exchange has declined to 48 per cent from 100 per cent, with a little under 3 lakh shares.

"The demutualisation process started on August 29, 2005, with the formation of a nine-member empowered committee. After 20 meetings in the last two years, a settlement was reached," said Das.

The CSE has signed an MoU with the BSE on July 30, 2007. Under the agreement, the BSE would share the trading platform with the CSE.

"The MoU would allow any listed member of the CSE a direct access to the BSE trading system. Earlier, a broker, who was exclusively listed with the CSE, could not trade on the BSE," said Das.

"We have signed a strategic MoU with the CSE. It will help the exchange to grow and it is in the mutual interest of both the exchanges," said BSE MD and CEO Rajnikant Patel.

Following the demutualisation, the CSE had applied to the Sebi for approval and trading would commence once the approval was in hand, added Das. In another development, the CSE would hand over its 10-acre plot on the Eastern Metropolitan Bypass to the West Bengal government.

Speaking to reporters, Das said, "We would hand over the land to the state government and would get Rs 4 crore for the first five acres, along with 60 per cent of auction sales proceeds for the remaining five acres."

Besides, the government had also promised a 10-acre plot at Rajarhat and another five acres in the city, he added.