The 132-year-old Bombay Stock Exchange is not wholly owned by its broker-members any more. The shares tendered by broker-members under the demutualisation process have been placed with private investors and the monies were credited to brokers’ accounts on May 17.
In a press release put up on its website, the BSE announced that it had completed the process of demutualisation on Friday. It has been done just in time to comply with the May 19 deadline set by the Securities and Exchange Board of India.
Apart from LIC and State Bank of India, which bought shares, the only foreign name that was visible on the Foreign Investment Promotion Board’s list was Caldwell Asset Management Co, which had applied for permission to buy 4 per cent in the BSE. Reuters reported that the US asset manager Atticus Capital, the second-biggest shareholder in Deutsche Boerse, had announced an affiliate had bought a 4 per cent stake in the BSE.
The BSE, which announced with much fanfare the 10 per cent shares it placed with Deutsche Bourse and Singapore Stock Exchange, is silent about the rest of investors. “The investments are of the nature of private placement and governed by a confidentiality clause,” said T V Raghunath, executive director (investment banking), Kotak Mahindra Capital, the company that is in charge of the BSE deal.
Sources who were party to the deal said only 91 per cent (3,443,806 shares) of the shares tendered by the brokers were taken up for private placement. At Rs 5,200 a share, the market capitalisation of the BSE is around $1 billion.
“With this placement the brokers’ ownership should be down to 48-49 per cent in the exchange,” said one broker not willing to be identified. For instance, brokers who tendered their entire holding of 10,000 shares were paid Rs 4.74 crore, at Rs 5,200 each for the 9,123 shares that have been absorbed. Members also said the rest of the shares they held would attract a one-year lock-in, if and when there was an initial public offering.
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