The Venture Intelligence Blog

The Firm show on  CNBC-TV18 has a report enquiring into why the leading Indian stock exchanges - BSE and NSE - haven't gone public themselves - especially after raising Private Equity capital with a clear understanding that such investors would seek profitable exits within a few years. With no revert from SEBI on clearances for the exchange IPOs, the PE investors in these exchanges have written to the Finance Minister and speak openly about their frustration. View the report video here  and  text version here . Extracts: Sohil Chand, MD, NVP India: “I think what is important is to see what has happened to the multiple and the Rs 3,950 represents a multiple of only 14 times trailing earnings. When we look at comparable stock exchanges, the listed stock exchanges whether it is Hong Kong or Singapore or other comparable markets, they traded 30 times forward earnings. So, in our estimate the NSE right now, the private markets are undervaluing it by 50 percent.” .....

As part of his speech at the Venture Intelligence APEX'13 Awards, Ashish Chauhan, CEO, Bombay Stock Exchange, described how PE/VC investors were like the mythological character Abhimanyu  who knew "how to enter (the Chakra Vyuh ), but not to exit". He suggested that they could, at time of their investment into an SME company, insist the company list on the BSE's SME Stock Exchange. "Then, you can create an exit (route) at the time of the entry itself," Mr.Chauhan said. The added benefit is that the various governance related provisions that investors desire - from declaration of financial results, etc - is ensured by the exchange and enforced by SEBI and other regulatory agencies. "Protection of minority rights - i.e., ensuring corporate democracy - is the primary job of the exchange. If the majority owner takes away most of the profits and shares only the losses with the minority, then the faith in the public markets will collapse,”...

  Special Guest at the Venture Intelligence APEX'13 Awards, Ashish Chauhan, CEO, Bombay Stock Exchange provided a witty account of his experiences as an entrepreneur including in founding two startup ventures: ExchangeNext (under which he launched multiple exchanges for trading petrochemicals, steel, paper, etc) with financing from the Reliance Group and a venture that created back office systems for brokerages (which was acquired by BSE which then asked him to join the exchange). For the more detailed APEX'13 Awards Highlights, Click Here For the more detailed APEX'13 Summit Highlights, Click Here Venture Intelligence is the leading provider of data and analysis on private equity, venture capital and M&A transactions in India as well as Financials & Valuations of Private Companies in the country. Click Here to view our products list including the Free Deal Digest Weekly: India's First & Mo...