Alpha Ideas

BSE Ltd, Asia’s oldest stock exchange, is looking to launch its initial public offering (IPO) before the end of this calendar year to raise up to Rs.800 crore, according to two people aware of the development.

The exchange and the intermediaries it has hired are working on regulatory aspects of the IPO, and the draft share-sale prospectus is expected to be filed before the end of the April-June quarter, said one of the two persons, both of whom requested anonymity.

The size of the IPO is likely to be Rs.700-800 crore, said the second person.

BSE is looking at September or October to launch the public offer, said the first person.

“The exchange business is a very well-regulated space and therefore BSE has most of the regulation-related things in place, which will make work quicker,” he added.

Work on the IPO has been under way since January, when the BSE invited three or four merchant banks to initiate work on the share sale.

“BSE hopes to complete the formalities within 9 to 12 months. BSE has already appointed merchant bankers and lawyers for the purpose of preparing of documents including DRHP (draft red herring prospectus). Initial meetings have already been conducted amongst different participants for document preparation,” said a BSE spokesperson in response to an email from Mint seeking comment.

We had decided in January to allow stock exchanges to list. We have granted an in-principle approval to BSE to list,” said Sebi chairman U.K. Sinha.

The exchange is looking at a valuation of close to Rs.6,000 crore for the public share sale, said the second person quoted.

BSE counts foreign stock exchanges such as Deutsche Boerse AG and Singapore Exchange Ltd among its shareholders. Other investors include Life Insurance Corporation of India, State Bank of India and Bajaj Holdings and Investment Ltd. Foreign investors such as US billionaire George Soros’s hedge fund Quantum’s Mauritius investment arm Quantum (M) Ltd, Canada-based investor Thomas Caldwell’s Caldwell India Holdings Inc. and US fund Argonaut Private Equity are also investors in the exchange.-from Mint