Dse Mulls Arm To Trade On Bse

Even as the governing board of Bombay Stock Exchange (BSE) has approved acquisition of 100 per cent equity in the Delhi Stock Exchange last week, the Delhi bourse plans to set up a 100 per cent subsidiary and seek membership in BSE.

The move, DSE president Sudhir Joshi said, was being planned to prevent members from losing out on the opportunity to trade on the BSE if the consolidation process is delayed. He sad, "This is one of the agenda items being considered to be taken up by the DSE board which will meet shortly."

The takeover of DSE by Bombay Stock Exchange (BSE) is likely to encounter obstacles, particularly on the valuation front. Senior government officials said the Centre was working on a proposal to ask BSE to transfer all its reserves to a separate Trust in the run-up to demutualisation.

Replying to queries, R Vaidyanath, general manager, business development, BSE said, "The reserves are the core strength of BSE and will stay with the exchange now as well as post demutualisation and corporatisation." He, however, said the BSE was not in a position to readily provide the total quantum of excess income "at this juncture".

Vaidyanath said that there was no such proposal for transferring the reserves of the exchange to a Trust. DSE sources also said that the exchange has not received any directive from the government or the capital market regulator, Securities and Exchange Board of India (Sebi).

As per the memorandum of understanding signed between BSE and DSE, the members of the Delhi exchange would be offered trading membership at a concessional rate. "The value of the concession would be arrived at after ascertaining the net worth of DSE and apportioning it equally among the members of DSE," sources said.

According to a DSE member, the valuation of DSE would also run into rough weather if the Centre issues any directive to BSE for transferring the reserves to a separate Trust. "The DSE has reserves of over Rs 65 crore which would be considered while the bourse is being valued," the member said.

The DSE president said the board which will meet in the next couple of days would consider the consolidation proposal. "It has to be ratified by all the members of the exchange subsequently," he said.

Joshi further said that as per the proposal, the members of DSE would not be allotted any shares in BSE after the latter's corporatisation. "The members will get only trading membership in BSE," he said. The Stock Exchange, Mumbai will, as per the proposal, put in place a permitted securities segment to commence trading in securities of companies listed on the DSE but not on the BSE.