BSE shortlists 5 bourses for stake sale

The Bombay Stock Exchange (BSE) is learnt to have shortlisted London, Nasdaq, Deutsche Borse, New York, and Singapore stock exchanges for the proposed sale of its 26 per cent stake.

At its board meeting yesterday, the BSE also decided to privately place some equity with domestic institutions and banks, provided they do not have their own broking outfits, in accordance with Securities and Exchange Board of India (Sebi) guidelines.

The BSE, Asia's oldest and the country's premier exchange, would be offering the stake to a maximum three strategic investors, sources said.

Sebi guidelines prevent a single entity from taking more than 5 per cent in a stock exchange.

It is learnt that the BSE would settle for those overseas bourses that had better technological know-how on derivatives trading, in which the BSE currently trails its rival National Stock Exchange (NSE) by a big margin.

"The BSE's trading volume in the derivatives segment is very marginal compared with NSE's. It is most likely that BSE settles for those strategic investors that can hold the exchange as an attractive platform for the derivatives segment," a source said.

Top BSE officials were unavailable for comment.

Private equity players such as IDFC Private Equity and ICICI Ventures and insurance behemoth Life Insurance Corporation (LIC) are likely to invest at a later stage in the BSE.

When contacted, T S Vijayan, managing director, LIC said, "We have invested in the National Stock Exchange and even in other institutions, but we haven't received any proposal for the BSE yet. If an investment opportunity in the BSE arises in the future, we may look into it."