The Delhi Stock Exchange, which has remained virtually defunct for the past few years, is scouting for strategic investors and plans to list on leading bourses -- the Bombay Stock Exchange and the National Stock Exchange -- as part of its revival efforts.
"The DSE Association has changed its status to DSE Ltd to facilitate its process of demutualisation and listing on the leading bourses of the country," Bharat Bhushan Sahni, the chairman of DSE Demutualisation Committee, said on Tuesday.
A decision to this effect was taken in an extraordinary general body meeting on April 7, he said, adding the exchange has approached the Securities and Exchange Board of India for approval.
The exchange plans to raise capital from Rs 7.6 lakh (Rs 760,000) to Rs 3 crore (Rs 30 million) through a rights issue to members. It is also looking for strategic partners by selling 51 per cent stake.
DSE has appointed Deloitte Touche Tohmatsu as an advisor. It plans to list on Bombay Stock Exchange and National Stock Exchange, Sahni said, adding that PNB Guilt, Mefcom Capital and Alliance Securities have been appointed as merchant bankers.
The bourse plans come even as the world's top exchanges like NYSE, Deutche Borse and Singapore Stock Exchange have picked up stake in BSE and NSE. DSE's revival plan is also essential since as per Sebi norms, all bourses would have dilute member brokers' stake to 49 per cent.
Sahni said it has been decided to reduce brokers' hold on the board by bringing 75 per cent non-broking members. The revival of the exchange would make it easy for small and medium investors to transact shares lying with them and not traded for years.
"This will bring liquidity and encash dead investment as over 1,800 company scrips had a presence on the DSE and were never listed on BSE and NSE," Sahni said.
Market sources said broker-members holding 2,000 shares of Rupee one each will be offered rights issue to increase the paid up capital to Rs 3 crore, which is mandatory for a company to be listed on leading bourses.
Sahni said the bourse has a cash reserves of Rs 90 crore (Rs 900 million) and total reserves of Rs 100 crore and plans to strengthen and revive the existing infrastructure and network.
Prior to 2004 when trading virtually stopped and volumes touched zero level, it had nearly 1,200 terminals in 80 cities and was considered to be a leading stock exchange in the northern region.
In 2001, the exchange clocked a daily business volume of Rs 1,000 crore (Rs 10 billion). Out of 3,000 companies listed on the DSE, 1,800 companies are exclusively listed on the local bourse.