BSE To Sell 4% Stake In CDSL Via Offer For Sale To Meet SEBI Norms
People walk through a metal detector at a security check-point at the Bombay Stock Exchange (BSE) building in Mumbai, India, on Wednesday, Oct. 16, 2019. (Photographer: Kanishka Sonthalia/Bloomberg)

BSE To Sell 4% Stake In CDSL Via Offer For Sale To Meet SEBI Norms

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Bombay Stock Exchange Ltd. will sell 41.8 lakh equity shares, or 4 percent stake, in Central Depository Services Ltd. using the offer for sale route.

BSE is the promoter of CDSL. The stake sale is being conducted on NSE for institutional investors today. Retail investors will be able to participate in the OFS on Friday.

At the end of September quarter, BSE owned 24 percent stake in CDSL. While banks and financial institutions' shareholding stood at 22.42 percent, mutual funds held 9.54 percent and foreign portfolio investors owned 1.78 percent stake in the company.

CDSL, which allows investors to deposit securities by opening an account in demat form, gets its revenues from transaction charges, account maintenance charges and settlement charges paid by depository participants as well as annual fees, corporate action and e-voting charges paid by companies whose securities are admitted in the depository's systems.

"The seller [BSE] proposes to sell up to 41,80,000 lakh shares of face value Rs 10 each representing 4 percent of the total paid-up equity shares of the company on Nov. 28 (for non-retail investors only) and on Nov. 29 (for retail investors and for non-retail investors who choose to carry forward their unallotted bids)," as per the notice.

Also read: BSE, NSE Issue Framework For Listing Of Commercial Papers

CDSL got listed on BSE in 2017. Through the IPO, BSE, which had 50.05 percent stake in CDSL, sold 26.05 percent of its holding, to meet the markets regulator's norms. A stock exchange cannot hold more than 24 percent stake in a depository.

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