(Disclosure:I am market making in the shares of BSE)
The chief executive of the Bombay Stock Exchange has urged regulators to allow Asia’s oldest bourse to push ahead with long-delayed flotation plans, while also calling for higher foreign investment limits in India’s domestic exchanges.
The issue has become increasingly pressing in recent months following complaints from a number of international investors who had bought stakes in the two main Indian exchanges, only to find hopes of selling them via a listing dashed by regulatory delays.
In theory, the Securities and Exchange Board of India, the markets regulator, has backed the idea of floating the country’s two main exchanges — the BSE and the National Stock Exchange, its larger competitor — a move that would bring India into line with other global economies, where major bourses are listed.
But since the BSE applied for permission to float in 2013, its application has been stuck in limbo, forcing it to mothball plans to raise $1bn through an initial public offering.
“We still want to do it,” BSE chief executive Ashish Chauhan told the Financial Times. “As soon as we get that approval, we would be able to float within a few months.”
Exchanges are keen to tap international investors, who have flocked to India and helped fuel a robust stock market rally after the election last year of Narendra Modi as prime minister. That has propelled the country into the world’s top 10 biggest equity markets, with a current total market capitalisation of about $1.44tn.
Mr Chauhan said he continues to “nudge and push” regulators to support his flotation plan. “It is basically a fear, probably, of the unknown that exchanges are getting listed for the first time. So, rightfully, they want to think it over and create a solid framework so that public trust is maintained.”-from FT