BSE appoints panel to select i-bankers for IPO

I-bankers will fix the issue price sources say the IPO may fetch Rs 800-1,000 cr
Press Trust of India / Mumbai Nov 28, 2012

 

The Bombay Stock Exchange ( BSE), Asia’s oldest exchange, has appointed a panel to select investment bankers for its public issue, which is slated to hit the markets in the first half of next year.

 

In an interview to PTI, BSE CEO & MD Ashishkumar Chauhan said the panel and the i-bankers will fix the IPO issue price.

 

He, however, refused to disclose to IPO issue size.

 

The BSE, which had reported a net profit of Rs 178 crore on a revenue of Rs 578 crore last fiscal, will be the first bourse to go public in the country.

 

Market sources said the IPO may fetch Rs 800-1,000 crore.

 

The regulator Sebi had this June notified new rules for ownership and governance of bourses, including norms for their listing, which bans self-listing.

 

The IPO is primarily aimed at giving an exit to existing shareholders who hold over 41% of equity.

 

The BSE, which again retained No 1 slot as world’s largest exchange by number of companies listed, has said F&O investors and brokers can save up to Rs 1,400 crore annually by trading on its platform due to lower fees that are 95-99% cheaper than the two rivals.

 

“If futures and options investors and brokers use our platform, they can save at least Rs 1,000-1,400 crore by way of brokerage charges every year. Our rates are 95-99 percent cheaper than the other two bourses,” Chauhan said.

 

He also said that people only see that BSE has spent Rs 100 crore as incentives for derivatives in the past one year, but not many know that trading on its platform could help save around Rs 1,400 crore for the industry.

 

While BSE charges Rs 5,000 as membership fee, NSE and MCX-SX charge Rs 5 lakh each, he said, adding “the transaction cost on the BSE is up to 99% lower than the market leader. Again, our membership cost, including refundable deposits is 90% lower than that of rivals.”

 

After the membership fee cut last year, the BSE attracted over 500 brokers and has a total of around 1,500 registered members.

 

Similarly, its derivatives volumes have seen a major spike since the incentives programme and a few months back it had been 50:50 between BSE and the NSE, which has averaged out to Rs 20,000-25,000 crore daily since then or about 25%. However, the BSE is the third largest equity options trading place in the world today.

 

Stating that BSE’s efficiency has improved manifold over the past couple of years, he said BSE has been able to cut trading speed from 300 milliseconds to just 10 milliseconds.