The much-awaited public offer of BSE is expected to be entirely an offer for sale (OFS) by the existing shareholders. Sources said the exchange has filed IPO papers with Sebi and shares worth over Rs 1,200-1,300 crore could be sold in the public offer.

The board of directors, at its meeting on Wednesday, approved the draft red herring prospectus (DRHP). While rival NSE has announced IPO plans, BSE has taken the lead by filing the draft papers. BSE -- earlier known as the Bombay Stock Exchange – had received in-principle approval from Sebi earlier this year to list its shares.

The exchange received robust response for the proposed OFS from the shareholders who have offered to tender an estimated three crore shares. The shares which are not sold in the OFS will be locked in for a year from the date of allotment of shares in the IPO.

BSE had set up an escrow account wherein the shareholders can tender shares for the OFS. As on date, the exchange has over 9,000 shareholders, including brokers and institutions. BSE has appointed Edelweiss Financial Services the lead merchant banker and AZB & Partners and Nishith Desai Associates legal advisors to the IPO.

The exchange had reported a 40 per cent increase in its consolidated net profit at Rs 52.72 crore for the first quarter ended June 2016. The Securities and Exchange Board of India (Sebi) notified amendments to the Stock Exchanges and Clearing Corporations regulations on January 1. The new rules are aimed at making it easier for stock exchanges to list their shares through an IPO.

Soon after the amendments, the exchange had sought approval for launching the IPO, saying it is in compliance with all the requirements for listing. Presently, Multi Commodity Exchange of India is the only listed bourse in the country. BSE's closest competitor NSE also plans to file for listing next year. It recently appointed Citigroup Global Markets, Morgan Stanley India, Kotak Mahindra Capital and JM Financial Institutional Securities global co-ordinators to manage its IPO.