The 70-year-old Madras Stock Exchange (MSE), with the consent of SEBI, has successfully completed the allotment of equity shares to the corporates and high net worth individuals under its disinvestment programme.
With this, MSE has complied with the demutulisation programme of the regulator, which required offering new shares through a bidding process. Sources said MSE received an overwhelming response from bidders to the extent of 87% of the expanded equity.
MSE’s strong fundamentals and sentimental factor influenced the good response from listed corporates across the country and HNIs, exchange officials told ET. Leading corporates — listed and unlisted — who have been allotted shares include: Amalgamations group (Bimetal bearings and Simpsons), Kalpathi Suresh of SSI, Orchid Chemicals, Polaris Holdings, Venture Tech solutions (Megasoft), Sonata Investments (Reliance energy-Anil Ambani group), Tidco, TCP (Udayar group). Besides, MSE has issued shares to HNIs. Though MSE was required to divest 51% or more to new investors, Sebi has approved allotment up to 72% of the expanded equity.
This has raised the disinvestment level to 57%. The Rs 10 paid-up share of MSE was placed at a premium of Rs 490, based on the estimated enterprise value of Rs 676. The exchange has mobilised Rs 9 crore from the disinvestment process. Apart from this, on the expanded equity of Rs 36 lakh, it has built reserves of Rs 11 crore.
Sources said MSE is now being viewed as a small and medium enterprise exchange by default. It is said that national and international stock exchanges are keen to forge an alliance with MSE and pick up stake for revitalising trading in SME sector.
MSE has more than 1,300 companies listed, of which more than 500 are exclusively listed on the exchange. Most of the corporates have retained their listing as they want to be associated with one of the oldest exchanges of the country, which has contributed to the industrial growth in the south.
Plus, MSE is financially sound with good assets in its books. Those who have picked up stake feel the exchange could play a role along with other regional exchanges, and with the support of Sebi in utilising the new funds for nurturing the growth of SMEs and help them in tapping equity route.
Source: Economic Times