New Delhi

As the 140-year-old stock exchange BSE charts a new growth path, it plans to foray into commodity trading business and also set up an international exchange in Gujarat to cater to global companies and investors.

“The stock exchanges, including BSE, need to change their business model and promote investment-based trading and help in capital formation to generate funds for investments across various sectors,” BSE CEO Ashish Chauhan said.

BSE, which is the world’s largest exchange in terms of listed companies and figures among top-ten globally on various other parameters, is also planning to foray into commodity exchange segment, for which it has got Sebi’s approval and further work is in progress.

“We have got approval from the Sebi and from our board.

The Sebi approval is to invest in a commodity exchange.

However, we are yet to approach the commodity markets regulator FMC for their approval.

“The application process takes a long time and once we submit the application to the FMC, it would go through it and then decide. Overall, it is a long process, but we have the right technology and capabilities and we are very positive about it,” Chauhan told PTI in an interview.

When asked whether the BSE would set up an entirely new exchange or acquire an existing one, he said, “Currently, we have not decided on our strategy. Now, since the approval from Sebi has come, we will discuss it internally and with our board. Accordingly, we will take a decision.”

With regard to the BSE’s IPO, Chauhan said the exchange had applied to Sebi for its IPO in January 2013.

“As and when the approval comes, BSE will go ahead with the process of filing the DRHP and other things. So, basically, we are awaiting the in-principle approval from Sebi,” he said.

The BSE is also very bullish on its SME platform.

“As many as 83 companies are listed already on our SME platform and 20 more are in the pipeline,” Chauhan said.

On plans to set up an international exchange in Gujarat, he said that “basically, the concept is that there are several international finance centres (IFSCs) across the world, such as Dubai, Singapore, Hong Kong, London etc”.

“Even Indian companies have to go and raise funds from those IFSCs. This concept has been deliberated several times in India as well, but could not fructify somehow.”

Foreign institutions say that they should be allowed to hold up to 15 per cent for parity of treatment to financial institutions irrespective of they being Indian or foreign entities.

“If that happens there would be some strategic investments by some foreign exchanges. Today, with 5 per cent cap they are essentially financial investors,” Chauhan added.

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