By Paresh Jatakia and Pooja Thakur/Bloomberg
Bombay Stock Exchange Ltd., Asia’s oldest, sold a 51% stake to investors led by Deutsche Boerse AG and Singapore Exchange Ltd., valuing the bourse at Rs40.6 billion ($950 million).
The exchange sold 16% to overseas investors and 25 percent to buyers in India, Chief Executive Officer Rajnikant Patel said in an interview in Mumbai on 13 April. In addition, the exchange completed the sale of 5% each to the Singapore and Frankfurt-based stock markets. Patel declined to name the other investors before regulators approved the sale.
India’s benchmark Sensitive Index quadrupled in the past four years as the economy expanded at an annual clip of at least 8%. The National Stock Exchange of India Ltd. in January agreed to sell a 20% stake to investors led by NYSE Group Inc. and Goldman Sachs Group Inc.
Deutsche Boerse, the world’s biggest stock exchange by market value and Singapore Exchange acquired 432,291 shares at Rs5,200 apiece. Brokers on 12 April approved the sale of new stock to the two exchanges.
The exchange is cutting its brokers’ stakes to 49% from 100% as part of a plan by regulator Securities & Exchange Board of India (SEBI) to separate ownership from trading.
Foreign and domestic investors including banks, insurance companies, high net worth individuals, mutual funds and private equity groups were keen to invest, T.V. Raghunath, executive director of investment banking at Kotak Mahindra Capital Co. that is advising on the sale, said in an e-mail on 12 April.
Bombay Stock Exchange, which operates the nation’s benchmark 30-share Sensitive Index, is seeking partners as it raises funds to upgrade its systems and catch up with the National Stock Exchange, its younger rival. The National Stock Exchange, founded in 1992, has double the daily trading value of its 132-year-old counterpart.
The Sensex advanced 47% in 2006, topping a 42% gain the previous year, as the nation’s $854 billion economy expanded at the second-fastest rate among major economies. The index rallied for a fifth year in 2006.