Alderman John Stuttard, the Lord Mayor of the City of London, with Bengal industry minister Nirupam Sen in Calcutta on Wednesday. A Telegraph picture

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Alderman John Stuttard, the Lord Mayor of the City of London, reckons that the beleaguered Calcutta Stock Exchange (CSE) could still attract some overseas interest.

Stuttard, who is leading a 30-member business delegation to Calcutta, met Chief Minister Buddhadeb Bhattacharjee and discussed the possibility of turning the city into a financial hub and rejuvenating the bourse.

“We discussed whether the CSE could be revived with the help of foreign financing,” said the Lord Mayor, whose main job is to promote Square Mile as the world’s leading international financial and business centre.

Square Mile is the commercial district of London which houses one of the world’s most vibrant financial markets.

Stuttard said British companies could participate in the revival of the CSE if they were approached.

“You need to have the right framework and regulation to develop the stock market. Foreign brokers should be allowed to play a role,” he told reporters on the sidelines of a business seminar in Calcutta organised by the British deputy high commission and Ficci.

The other British delegates included Ibukun Adebayo, business development manager of the London Stock Exchange (LSE), who did not rule out the possibility of the LSE investing in the Calcutta bourse.

“We are looking at exchanges in several countries and they could be regional as well,” Adebayo said.

However, he clarified that no formal discussion on this issue had taken place.

Incidentally, the CSE is going through a process of demutualisation whereby at least 51 per cent would be offloaded to the public. Shareholders who have trading rights cannot subscribe to the issue. The move was initiated at the instance of the Securities and Exchange Board of India.

The CSE has appointed PricewaterhouseCoopers to carry out the stake sale. April 30 was the last date for submitting expressions of interest for the stake purchase. It is learnt that the Bombay Stock Exchange is willing to take a 5 per cent stake in the CSE.

City-based Uco Bank and Allahabad Bank, and the state-run West Bengal Financial Corporation and the West Bengal Industrial Development Corporation are also keen to pick up 5 per cent each.

However, only the WBIDC has made a firm commitment while the others have merely given a letter of intent. Even after this, the CSE has the headroom to sell another 26 per cent to strategic investors where the LSE or its sub market, the Alternative Investment Market (AIM), may play a role.

Incidentally, there have been suggestions that the CSE could be modelled on AIM which provides a platform for medium and small cap companies.

The CSE has a paid-up equity of 1,188 shares with a face value of Rs 250 each. Its authorised capital has been recently raised to Rs 10 lakh.

The CSE had initially floated a global tender on March 7 to sell 51 per cent according to the demutualisation guidelines. It met with poor response and had to extend the deadline for the submission of EoIs twice.

According to the Sebi guidelines, all exchanges have to divest 51 per cent to financial institutions (FIs), foreign institutional investors (FIIs), corporate bodies other than broking outfits by August.

The guidelines state that no individual investor, be it FIs, FIIs or corporates, can hold more than 5 per cent in an individual capacity in any stock exchange. The demutalisation process has been successful both at the National Stock Exchange and the Bombay Stock Exchange where foreign outfits have picked up stakes.

The CSE’s fortunes dipped after the payment crisis that rocked bourses across the country in 2001.