By next month, the Bombay Stock Exchange will be de-mutualised, and the brokers who trade on the exchange and the owners of the exchange will be different.
Just six months ago, the New York Stock Exchange was almost on the verge of finalising a deal with the BSE for a strategic partnership, but the Sebi guidelines which put a cap of 5 per cent on the shareholding of any exchange was announced (foreign investment is capped at 26 per cent), and this spoilt the party.
The NYSE then entered into a deal to pick up a stake in the National Stock Exchange along with Goldman Sachs, General Atlantic and Softbank Asian Infrastructure.
This made the job more difficult for Rajnikant Patel, the exchange's executive director and the man who is presiding over this historical transformation of the country's oldest and most prestigious stock exchange -- while the NSE has a larger turnover than the BSE, the Sensex is a lot better known than the Nifty.
Patel, who began his career as a banker, headed surveillance functions at the Reserve Bank of India.
The story began with the BSE board selling 5 per cent of its equity each to Frankfurt-based Deutsche Boerse AG (the world's biggest stock exchange in terms of market capitalisation) and the Singapore Exchange at Rs 5,200 per share.
What is now proposed is to sell another 41 per cent stake in the BSE to 20 investors, including domestic and foreign financial institutions at the same price. This will make it the country's largest private placement ever. LIC and SBI are believed to be among the Indian institutions in the fray.
Says Deena Mehta, BSE's acting president at the time who hired Patel, "Being a banker and also having experience as compliance officer, Rajnikant Patel was the right choice." The bachelor who has made the 25th floor of Jijiboy Towers his virtual home ever since has more than done justice to the job he was appointed to do.
Adds Mehta, "De-mutualisation will be completed in time and I will only say that investors are showing confidence in BSE's future and Rajnikant should live up to their expectations and further improve the performance of the exchange." Apart from his role in the exchange's demutualisation, Patel also registered 'Sensex' as a brand, both in India as well as in the US.
