Insurance behemoth Life Insurance Corporation of India and State Bank of India are among the investors though no confirmation was available from the exchange.

"It is the largest private placement done in the country. This speaks of the franchise of the exchange," T V Raghunath, executive director, Investment Banking, Kotak Mahindra Capital, which is advising BSE on the sale, said.

In a press release, BSE said it has received interest from 20 leading domestic financial institutions, foreign funds, high networth individuals and corporate houses for selling 41 per cent per cent stake in the stock exchange.

BSE held its board meeting and extra-ordinary meeting on Thursday to complete the demutualisation process. The deadline for completing the 51 per cent stake held by broker- members in BSE, Asia's oldest exchange, is mid-May this year.

Recently, it sold 5 per cent stake each to Franfurt-based Deutsche Boerse AG and Singapore Exchange at Rs 5,200 per share. The deal valued the exchange at $800 million.

The exchange has proposed to finalise the sale of 41 per cent shares to select investors at a price of Rs 5,200 per share - the same price at which it sold shares to the two foreign bourses.

"The response to BSE investment opportunity has been truly overwhelming and we are delighted to have as our investors domestic and foreign institutions. The new ownership pattern of the exchange will significantly strengthen its institutional character," the release said.

Regulations allow 49 per cent FDI in stock exchanges with a separate cap of 26 per cent for FDI and 23 per cent cap on FIIs. There is a five per cent cap on individual holdings.