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Our Bureau

Mumbai, Nov. 11 The board of directors of Bombay Stock Exchange have recommended a hefty bonus of 12 shares for every share held by shareholders, subject to approvals.

The board, which met on Saturday, also re-elected Mr Jagdish Capoor as Chairman of the Exchange.

The bonus issue will increase the capital base of BSE, making for easier listing of the exchange’s shares, said market men. Just such a request had been made at the last AGM of the exchange where member brokers had wanted the listing of BSE shares to be expedited.

SEBI’s recent easing of restrictions on shareholding in stock exchanges — increasing ownership limits for institutional entities from 5 per cent to 15 per cent — could create some demand for BSE shares, they felt.

BSE was demutualised, or made a corporate entity 18 months ago. Deutsche Bourse and Singapore stock exchange had picked up 5 per cent stake each at Rs 5,200 a share.

BSE is a cash-rich exchange with reserves of nearly Rs 1,600 crore said sources. For fiscal 2007-2008, BSE had paid a dividend of 3,000 per cent.

Around 50 per cent of the shares in BSE are held by 600 to 700 broker-members. The rest of the stake is held by Deutsche Borse, Singapore Stock Exchange, LIC, SBI and a clutch of foreign investors, said sources.

Mr Capoor had been appointed Chairman after the post was left vacant by Mr Shekhar Datta’s resignation in June.

There was a spate of resignations at BSE this year allegedly over differences with respect to BSE’s functioning (it has been losing volumes to NSE), its investments in a technology platform as well as its agreement to buy stakes in a stock exchange and in a commodities exchange. A board member, Mr Jamshyd Godrej, had also resigned at the same time as Mr Datta. In August, CEO of BSE Mr Rajnikant Patel had resigned.

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