The Bombay Stock Exchange and the National Stock Exchange are appointing valuers to assess the fair value of companies on their dissemination boards.
The BSE was empanelling or appointing 25-30 Category I merchant bankers to carry out the valuation, sources said. The BSE last week put up norms for independent valuers on its website. The NSE has started a similar process.
With the derecognition of regional exchanges since 2014, 3,000 companies were moved to the dissemination boards of the BSE and the NSE. There are over 1,000 companies now on the dissemination boards of the two exchanges, according to sources.
Investors in these companies must register with broker members of these exchanges who are provided a facility for placing bids or offering requests for clients. Trades are directly concluded by the buyer and the seller.
In a circular on October 10, the Securities and Exchange Board of India had asked companies on dissemination boards of the exchanges to either raise capital for listing or exit the dissemination boards. The companies have been given nine months to accomplish this.
Sebi said promoters of these companies must in consultation with the stock exchange appoint an independent valuer. If the fair value determined is positive, the company’s promoter will acquire shares from the public by paying the value determined.
The NSE did not respond to an email and the BSE declined comment on the issue.
“This is a positive step in but it may be difficult to extract the desired financial information about the company,” said Mahavir Lunawat, managing director, Pantomath Capital Advisors.
The Coimbatore Stock Exchange, Bangalore Stock Exchange, Saurashtra Kutch Stock Exchange, Mangalore Stock Exchange, Inter-Connected Stock Exchange of India and Cochin Stock Exchange are among the 18 regional bourses that were derecognised.
Sebi had subsequently allowed companies listed solely on these exchanges to delist or list on national stock exchanges within 18 months.