By James Fontanella-Khan

The Bombay Stock Exchange said yesterday that it was planning to list its shares in a move that would make Asia’s oldest bourse the first exchange to go public in India. “We are in a preparatory stage for a listing,” Madhu Kannan, chief executive, said. “We are getting internally ready but the time frame is something difficult to predict.” The decision to list the bourse is the most important taken by 37-year-old Mr Kannan, the bourse’s youngest ever chief executive, since he was named in May to run one of India’s most famous financial institutions.

It also signals a desire by the exchange to reduce its reliance on the cash equities market which provides almost all of its revenues. He said: “We want to transform this institution from what was essentially a single-product exchange to one which offers tradable products across all asset classes.” The 135-year-old bourse has had a mixed performance since it lost its dominant position in the mid-1990s to the National Stock Exchange, whose daily trading volumes are three times higher than its older rival. The BSE has about 5,000 listed companies, while the NSE has about 1,400. The BSE also faces new challenges from start-up exchanges, such as the MCX-SX, which launched this year.

The BSE is currently owned by several brokerage houses, foreign institutional investors and two international exchanges. Deutsche Börse and Singapore Stock Exchange both have a 5 percent stake, which they acquired in 2007. Brokers and investors welcomed the move, as there has been speculation for some time about a possible bourse listing. Several analysts suggested that a listing would attract new foreign exchanges who have been eyeing the growing Indian market. However, current market regulations only allow international exchanges to buy up to 5 percent of an Indian bourse.

Kannan, who grew up in India but has spent most of his career in the US at the New York Stock Exchange, has been trying to reform the BSE by focusing on improving technology and bringing new talent to the bourse’s headquarters in the Fort district of Mumbai.