Bombay Stock Exchange's IPO may be delayed

The BSE would be missing the year-end deadline it had set for itself for going public, as the oldest bourse of Asia is yet to hear from market regulator Sebi on its IPO application.

"The exchange is yet hear from the Sebi, despite it submitting all the clarifications that the regulator sought after filing the IPO documents a few months back," a source told PTI.

Managing director and chief executive of the Bombay Stock Exchange Ashishkumar Chauhan refused to comment. Sebi officials too could not be contacted.

Last December, BSE appointed 14 merchant bankers for the IPO and had said it was planning to hit the markets by the end of the year.

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BSE's benchmark Sensex ended Samvat 2069 scaling a lifetime high at 21,196.81, after touching an intra-day record of 21,293.88, surpassing the previous record of 21,206.77 reached on January 10, 2008.

As per the source, BSE is set to miss the IPO deadline of Q4 of 2013, as it is yet to get some exemptions from the regulator from the new rules.

As per the new rules, IPO-bound market infrastructure institutions like bourses have to ensure that every shareholder is `fit and proper', which the BSE finds it as an uphill task.

"The exchange has sought certain clarifications and some exemptions from the Sebi from these rules, without which the initial public offering cannot go ahead," the source said.

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The new rules came into effect last year, following the Bimal Jalan committee recommendations.

The Sebi allowed stock exchanges over three years old to list their own shares through an IPO in June 2012 after accepting the recommendations of the Jalan committee.

According to the source, Sebi seems keen that the BSE comply with the new rules.

After its corporatisation in 2005, the BSE is owned by more than 700 brokers. Under the demutualisation and corporatisation, BSE brokers' stake came down from 100 per cent to 49 per cent with the majority stake being now held by institutions like LIC, State Bank of India and Aditya Birla Group, among others.

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Deutsche Borse and Singapore Exchange own nearly 5 per cent each in BSE. Construction major Shapoorji Pallonji also owns a minority 0.24 per cent in the exchange, but is still the 24th largest shareholder.

Another key shareholder is the US business magnate George Soros who bought a 3.9 per cent stake in the BSE for Rs 160 crore (Rs 1.6 billion) from Dubai Financial Group.

As and when listing happens, the 138-year-old BSE, which had reported a net profit of Rs 178 crore (Rs 1.78 billion) on a revenue of Rs 578 crore (Rs 5.78 billion), will be the second bourse to go public after the MCX made its debut in March this year.

Market sources value BSE, which is the world's largest bourse in terms of number of companies listed with over 5,000 firms, at around $1 billion, and initial reports then had said it could fetch Rs 800 crore (Rs 8 billion) to Rs 1,000 crore (Rs 10 billion) from share sale.