Seven in race for DSE stake

The Delhi Stock Exchange (DSE) has received expressions of interest (EoIs) from seven investors, including the US-based Horizon Assets Management and Kuwait-based Noor Investments, for buying 5 per cent stake each in the bourse.

Financial Technologies India (FTIL), the promoter of the Multi Commodity Exchange (MCX), has also shown interest in the exchange. V Hariharan, chief technology officer, Financial Technologies said, "We will take a final decision on investing in the DSE, depending on the finance ministry's view."

The Delhi-based Liberty Group is also one among the several companies that have submitted their EoIs.

Deloitte Touche Tohmatsu, Allianz Securities, Mefcom Capital Markets, Nexgen Capital and PNB Gilts are the merchant bankers for the process.

The DSE, lying defunct for the last three years, is also in talks with stock exchanges of Dubai, Kuala Lumpur and Mauritius, several domestic banks and institutional investors to sell stake and revamp the otherwise ailing exchange.

"All the investors are expected to submit their EoIs by the end of this month. The selected investors will be announced by August-end," said Bharat Bhushan Sahny, director, DSE, and chairman of the demutualisation committee.

The exchange is looking for 11 investors to dilute 51 per cent stake, in line with the Securities and Exchange Board of India's (Sebi) demutualisation scheme, before August-end. According to the Sebi norms, each single investor can buy a maximum of 5 per cent stake in a stock exchange.

The DSE is the first regional bourse to undergo demutualisation.

The enterprise value of the DSE is pegged at Rs 400-500 crore and the 51 per cent stake is likely to fetch Rs 200-250 crore to the member brokers, who will divest their stake.

Financial Technologies, whose software runs more than 2 lakh terminals, will create the trading platform for the DSE.

The bourse may introduce some innovative products such as futures and options F&Os and focus on the SME segment. The daily turnover of the DSE, where about 3,000 companies are listed, was around Rs 375 crore in FY01.

The bourse also recently increased its paid-up capital to Rs 3.03 crore to enable the company to list on the Bombay Stock Exchange at a future date, said Sahny.