Deutsche Borse nod for BSE pie

The battle of bidding for the Bombay Stock Exchange stake is heating up, as Deutsche Borse has also got its supervisory board's approval to place a higher bid for the stake.

The BSE is coming out with its initial public offer (IPO) as part of demutualisation process.

It is reliably learnt that Deutsche Borse had valued the country's bourse at a lower price than other players have shown interest in bidding. Hence, to be on the safe side, the German exchange took a conscious decision to approach the board before revising its bid for the BSE stake.

The valuation of the BSE is put at anywhere between $600 million and $800 million, and some investment intentions are shown at this levels with the Singapore Stock Exchange (SGX) offer being on the higher side of the range. And now, Deutsche Borse may also put its bid on the higher side of the range.

As the supervisory board and SGX are from different time zones and if both of them can enter as strategic investors, the BSE will get double benefits.

Sources do not rule out a scenario where both the exchanges end up getting 5 per cent equity in the BSE.

And if that happens, the country will have representation from all three major regions of the world as the National Stock Exchange already has a partner from the US in The New York Stock Exchange.

Another issue that the BSE board will have to decide is the selection of other private equity players, as it can divest only up to 26 per cent to foreigners before the IPO.