Vadodara Stock Exchange may divest 26% by May 2006

The Vadodara Stock Exchange (VSE) may consider choosing the path of divestment to strategic investors based on the recent G Anantharaman committee report on "" The future of Regional Stock Exchange (RSE) "" post demutualisation, which was released on Monday by Securities and Exchange Board of India (SEBI).

Talking to Business Standard, Prasad Akolkar, managing director of VSE, said, "We will decide upon the 26 per cent divestment to strategic investors by the end of May."

"We know that we have very less time on divestment and we need to decide fast", Akolkar added.

The VSE's demutualisation and corporatisation was carried out in September 05 and it has three more months to divest 51 per cent of it holdings to public in accordance with the SEBI guidelines.

On Tuesday, VSE had its board meeting which was already pre-scheduled to carry out its routine business.

Further he said during the meeting the board members did take note of the Anantharaman's committee report and its awaiting more detail on the report to discuss it at length for further action on it.

The report has recommended modalities for increasing the public shareholding in demutualised stock exchange.

The Committee recognises that all stock exchanges might not necessarily adopt the IPO route for increasing the public shareholding but it can induct some strategic partners to hold upto a maximum of 26 per cent in case a strategic partner is an exchange, multilateral agency, insurance company, bank, depository or clearing corporation.

Showing his preference for the divestment to strategic investors, Akolkar, said, "We will specially convey a board meeting before the end of May 06 to discuss in detail and chalk out plans to divest."

"A concrete proposal on the modality of divestment will be kept before the board members during the meeting," he said.

However, he clarified that any final decision in this regard will be taken with the consent of all the board of directors and members of VSE.

Under the post corporatisation and demutualisation of stock exchange, the stock exchange has to divest 51 per cent of it holding to public through IPO. He said if majority share is divested to strategic investors then there is no need to divest the remaining by IPO.

"Out of the 51 per cent, if 26 per cent is divested to strategic investors, then we can divest the remaining holding through placement method," he added. However, he refused to divulge the strategic investors of VSE, if any.