About 60 foreign and domestic institutional investors have queued up to buy equity in the Bombay Stock Exchange. Brokers currently hold 95 per cent of BSE.

It's a race against time for the BSE, given the fact that the market regulator has decreed that the brokers' stake in the exchange should be diluted to 40 per cent or lower by mid-May.

Sources close to the developments said the big question now was how much premium the brokers would receive on their shares, compared to the Rs 5,200 per share given by Germany's Deutsche Boerse.

Last month, Deutsche Boerse bought 5 per cent stake in the BSE after the exchange, for which the exchange had issued fresh shares.

The stock exchange, which had issued a circular to members for an "offer for sale", asked the members to tender their shares to an escrow account at a base price of Rs 5,200 per share.

The BSE members will continue to retain trading rights even after they offload their stakes.

Mohan Vijan, chairman of the BSE Brokers' Forum, said he was confident that all the BSE brokers will submit half their shares to the BSE escrow account by March 9, the deadline set by the exchange.

Each BSE broker holds 10,000 shares of Re 1 each. "Rs 5,200 per share is only the base price. We expect investors to pay much more than that," said Vijan.

It is learnt that members wanted a valuation of at least $1 billion for the exchange, compared to $855 million offered by the Deutsche Boerse.

Sources said the BSE was free to issue fresh shares if it failed to mobilise the required shares from its brokers by Friday.

Issuing fresh shares will also be costly for Deutsche Boerse, because it would need to buy more shares in the exchange to maintain its 5 per cent stake.