BSE’s IPO Plan Gains Traction, Board Approves Draft Papers
BSE to file draft papers for Rs 1,000-crore IPO with SEBI over the next few days.
The board of leading stock exchange BSE has approved draft papers for its estimated Rs 1,000-crore IPO, which will be filed with markets regulator SEBI over the next few days. The board of directors, at its meeting held on Wednesday, approved the draft red herring prospectus (DRHP), the update available with BSE showed.
Shares worth over Rs 1,000 crore could be sold in the much-awaited IPO, which is expected to be entirely an offer for sale (OFS) by the existing shareholders. BSE, earlier known as the Bombay Stock Exchange, received in-principle approval from Sebi earlier this year to list its shares.
The IPO papers for Asia’s oldest bourse could be filed with SEBI in a few days, sources said. The exchange received a robust response for the proposed OFS from the shareholders who have offered to tender an estimated three crore shares. The shares, which are not sold in the OFS, will be locked in for a year from the date of allotment. BSE had set up an escrow account wherein shareholders can tender shares for the OFS in the proposed IPO.
Till date, the exchange has nearly 9,283 shareholders, including brokers and institutions. BSE has appointed Edelweiss Financial Services as the lead merchant banker and AZB & Partners and Nishith Desai Associates as legal advisors to the IPO. The exchange had reported a 40 percent increase in its consolidated net profit at Rs 52.72 crore for the first quarter ended June 2016. The Securities and Exchange Board of India (SEBI) notified amendments to the Stock Exchanges and Clearing Corporations regulations on January 1.
The new rules are aimed at making it easier for stock exchanges to list their shares through an IPO. Soon after the amendments, the exchange had sought approval for the launch, saying it is in compliance with all the requirements for listing. Currently, Multi Commodity Exchange of India is the only listed bourse in the country.
BSE’s closest competitor NSE also plans to file for listing next year. It recently appointed Citigroup Global Markets, Morgan Stanley India, Kotak Mahindra Capital and JM Financial Institutional Securities global co-ordinators to manage its IPO.