A sale of six per cent stake to a strategic investor will top the agenda of the Bombay Stock Exchange’s (BSE’s) board when it meets for its annual general meeting tomorrow. The allotment would be of a little over 6.5 million shares on a preferential basis between Rs 360 and Rs 400 a piece, valuing the exchange between Rs 3,500 crore and Rs 4,000 crore.
While no official comment could be had from BSE, sources said the board was making a provision to get strategic investors in future. Of late, BSE shares have been in great demand due to aggressive policies adopted by the new management to gain market share from its rival, the National Stock Exchange, and to face competition from the MCX Stock Exchange.
Recently, Oklahoma-based private equity firm Argonaut Ventures and jewellery company Blue Star Diamonds picked up some stake in the exchange through off-market deals. They are now among the top 20 investors. Argonaut was known to be in the race with US hedge fund legend George Soros and the world’s third-biggest philanthropist, George Kaiser, to acquire Dubai Financial Group LLC’s four per cent stake in BSE. The fund bid Rs 370 per share. But, Dubai Financial delayed its plans after deciding that the exchange had the potential to get higher valuations in the near future.
The other proposals to be discussed include approval of up to five per cent equity stake for an employee stock option scheme, re-nomination of Andreas Preuss, deputy CEO of Deutsche Boerse AG and CEO of the derivatives exchange, Eurex, on the board, and nomination of stock broker Uttam Baggri as trading member-director.
Prakash Kacholia of Emkay Global Financial Services and Ishaat Hussain of Tata Sons are the outgoing directors. While Kacholia was not eligible for re-election, Hussain opted to retire, as another Tata veteran S Ramadorai was recently made chairman of the BSE board.
