Premier stock exchange BSE's IPO pricing is "fair" and is based on robust feed back from institutional investors, according to investment bankers.
Asia's oldest bourse has fixed the price band at Rs 805-806 per share for its upcoming initial public offering (IPO), through which it aims to raise up to Rs 1,243 crore.
The initial share sale, which will also be the first this year, opens on January 23 and closes on January 25.
"After taking intensive feed back from the institutional investor and following due process, price discovery has been done. Further based on international comparisons (with global stock exchanges) I think we have arrived at a fair price," Edelweiss Securities President and CEO Vikas Khemani told reporters here.
According to the investment bankers "its not just the success of the IPO that matters but also long term success for the new shareholders that come in to that extent institutional investor who will continue so that factor has also been kept in mind".
Significantly, BSE currently offers 85 percent of the net profits as dividend and plans to continue with the high dividend policy in the future, its managing director and CEO Ashishkumar Chauhan said.
While noting that there are various revenue drivers for the exchange including the newly launched international exchange at Gujarat's Gift city, the BSE CEO said that the bourse needs to improve its market share in various segments.
BSE has 13 percent market share in equities cash segment, while its equity derivative trades have also sharply declined and is far behind its closest competitor NSE.
During the IPO, shareholders will sell 15.43 million shares estimated to be around Rs 1,243.44 crore at the higher end of the price band.
The IPO of 15,427,197 shares of face value of Rs 2 each will constitute up to 28.26 percent of the fully-diluted post offer issued share capital of BSE, it said in a public notice.
The company said bids for the issue can be made for a minimum of 18 shares and in multiples of 18 thereafter.
Among the existing shareholders are Bajaj Holdings Investment, Caldwell India Holdings, Acacia Banyan Partners, Singapore Exchange, Mauritius-based arm of American investor George Soros' Quantum Fund and foreign fund Atticus.
Further, Chauhan said that BSE would dilute 26 percent stake through depository CDSL's IPO. CDSL, in which BSE has 50 percent stake, has recently filed papers for IPO with Sebi.
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