The Bombay Stock Exchange is now BSE Ltd. The name change was approved on Wednesday by the exchange board members in its sixth annual general meeting, after demutualisation. The name has been changed keeping in the mind the plans to launch an initial public offer.
The board also approved the appointment of Dipak Chatterjee as shareholder director, Sudhakar Rao as public interest director and Anil Shah as trading member-director. For the first time, a trading member director in BSE was appointed from outside Mumbai. Shah is from Ahmedabad and runs Span Fincap.
BSE also approved prefrential allotment of shares. About 1.27 million shares would be issued by BSE to the three institutions, including the Singapore Exchange, Deutsche Boerse and HDFC Bank at Rs 375 each. This values the exchange between Rs 3,800 crore and Rs 4,000 crore. BSE shares were traded between Rs 200 and Rs 250 in recent months. The deals were largely between small investors and domestic stock brokers.
BSE’s valuation had suffered after the Bimal Jalan committee, formed to suggest a road map for market infrastructure companies, gave its report last year.
A key recommendation of the Jalan report was not allowing stock exchanges to list. BSE has been planning to file for an Initial Public Offer for a long time. Last year, the BSE had approved issue of six per cent fresh equity shares to strategic investors, to improve its equity capital base before the public offer.
Through the fresh issue, HDFC Bank’s stake will rise by one per cent. HDFC is to buy a million shares, while the two foreign exchanges would pick up 135,000 shares each. The share sale will help BSE raise Rs 47 crore, to be partly used to pay market makers, say sources. The share will be issued to Singapore Exchange and Deutsche Boerse to keep their holding in BSE at five per cent, as the new issue to HDFC would increase the equity base.
