The Bombay Stock Exchange will be offloading 26 per cent stake to a strategic partner and the remaining in retail market through an IPO.

Kotak Mahindra, the financial advisor for the demutualisation process, has selected eight leading global bourses for the stake sale.

"We are in the process of selecting our strategic partners. We will be completing this procedure by May 2007," Rajanikant Patel, CEO and MD BSE said on Friday.

Sebi is expected to prescribe criteria for selection of strategic partner and will be announcing these norms soon as the process has to be completed within a span of nine months.

"There exists automatic approval from the Reserve Bank for a foreign partner interested in 26 per cent stake in an Indian financial institution," he added.

Nasdaq president and CEO Robert Greifeld had said during his visit on August 1 that he was in favour of global consolidation of exchanges and had also held a meeting with BSE officials to possibly discuss picking stake in the exchange.

Nasdaq had made a 2.4 billion pound bid for London Stock Exchange. However, the bid was out rightly rejected by LSE, after which Nasdaq hiked its stake to 25.3 per cent, buying LSE's largest shareholder.