The recent crash in the stock market and a sharp fall in average daily volumes have not dented the demand for new membership rights at the country's premier stock exchange, the Bombay Stock Exchange.
The asking value for a membership card at the BSE has now soared to Rs 90 lakh (Rs 9 million) compared with the initial reserve price of Rs 75 lakh (Rs 7.5 million).
The exchange recently managed to sell 70 new deposit-based membership rights to various individuals and corporate clients out of which some cards were offered at a substantial premium to the reserve price.
Confirming the development, a top Bombay Stock Exchange official said, "We managed to generate good amount of interest and have offered a few memberships rights at Rs 90 lakh each, indicating a revival of sentiments for BSE. Most of the demand has come from corporate clients."
This is significant because the exchange had decided to invite membership from all over the country in "Cash Segment (Equities and Debt)" at a deposit of Rs 75 lakh. The number of membership to be offered were restricted to 100, the official added.
The membership will have exclusive trading rights and no ownership rights of BSE. The deposit of the members will be subject to a lock in period of three years.
Any member desiring to withdraw his membership after the lock in period or at any point thereafter will have to give a one-year notice to that effect to the BSE.
In addition to the amount of deposit based membership, i.e. minimum of Rs 75 lakh, the member has to pay, a minimum base capital of Rs 10 lakh (Rs 1 million), contribution to the trade guarantee fund of Rs 10 lakh and non refundable admission and broker contingency fund of Rs 250,000 each to the exchange.