Moneycontrol
Last Updated : Jan 16, 2018 03:34 PM IST | Source: CNBC-TV18

BSE approves Rs 166 cr share buyback within a year of listing

The Bombay Stock Exchange (BSE) has approved a share buyback of Rs 166 crore. This buyback comes within the first year of the exchange's listing. In an interview with CNBC-TV18, Ashish Chauhan, Chief Executive Officer of the BSE shared more details.

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The Bombay Stock Exchange (BSE) has approved a share buyback of Rs 166 crore. This buyback comes within the first year of the exchange's listing. In an interview with CNBC-TV18, Ashish Chauhan, Chief Executive Officer of the BSE shared more details.

We have a lot of cash on our balance sheet and we will continue to use that cash in an optimal manner, he said.

We are very keen to start a commodity exchange on our own, he added.

We have announced that on January 29, we are going to launch mock trading of commodity exchange, said Chauhan.

He hopes to make a real launch of commodity exchange by October 2018, he further mentioned.

Below is the verbatim transcript of the interview.

Latha: Why this buyback now? I thought you will have a lot of expansion plans with possible permission for commodity exchanges?

A: We have basically a lot of cash on our balance sheet, which is known even before we listed. When we listed, we went for OFS which is where the existing shareholders sell their shares to other shareholders, newcomers.

So we will continue to use that in optimal manner but there were requests from existing shareholders, institutional as we as retail saying that since you have so much, can you do something – the board decided to go ahead with this.

Anuj: Everyone knows the kind of cash that you have and that is only going to grow but the other issue is could you be looking at inorganic opportunities? One possibility doing the round is to merge with a commodity exchange. Now that we will have cross products being allowed maybe from October this year, so to become stronger and more cohesive sort of exchange, is that a possibility?

A: Currently there are no plans. We are basically very keen to start on our own. you may recall in 2015, we were trying to set up a new commodity exchange and we were told to wait because the regulators will get merged and then they will allow us to do the same in a single segment and that is how we have planned and after two and a half to three years that is being allowed, so we are currently ready. So we think we have something up our sleeve and we will continue to do that but if something comes up, why not but currently it is more important to focus on doing on our own.

Sonia: If you plan to start on your own, what kind of a timeline are we looking at here, will it be within this calendar year itself?

A: It depends on the regulations but we have announced on January 29, we are going to launch mock trading. So effectively our members would be able to test what is coming – of course trading looks the same for the members, we need to do some backend work, which we have done for the last two and a half years, we know what other exchanges do in commodities. So that has helped us prepare ourselves well.

Latha: So no question of merger and acquisition (M&A), no question of buying up an existing exchange?

A: Currently it is not on the cards.

Latha: I just wanted to come back to the buyback for a bit, it is a tender buyback?

A: It is a buyback from the market.

Latha: What is the maximum you will spend on this and how much free cash will you have left after the buyback?

A: Basically, we have kept the price at Rs 1,100. It is the maximum at which we can buy it below that whatever is available, we will continue to buy. The scheme is supposed to be open for six months as per the regulation.

Before that, if we exhaust Rs 166 crore then it gets over and so that is basically the contours of the scheme.

Sonia: What is the cash on books now?

A: Currently, as of March 31, 2017, it was around Rs 666 crore. It has added some more because of the stake sale of CDSL and then this money goes away. So basically there will be enough and more available.

Latha: When should we hear more about the commodity exchange?

A: We have already announced the first lap of starting the mock. So as and when the regulation becomes clearer in October 2018, we hope to launch.

Sonia: Your currency derivatives segment has also started to do well, do you have any plans to charge for this particular segment?

A: We have been charging now for three years now. In fact, the first year we did not charge and then we were told that we will have to charge, we start charging and we have been charging reasonable sums and despite that now we are close to 60 percent of the market share. So the perception that you have that we have not been charging is wrong.
First Published on Jan 16, 2018 10:51 am

tags #Business

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