Ontario Teachers’ Pension Plan Board, one of the largest institutional investors in Canada, and Capital International Group are in separate talks to buy a minority stake in the National Stock Exchange (NSE), ahead of its planned public offering slated later this year.
Both investors are in talks with some of the existing foreign stockholders, including Goldman Sachs Inc, and private equity firms Tiger Global and General Atlantic, to buy up to 5 per cent in India’s largest stock exchange, which was recently crowned the biggest in the world by way of derivative trading volumes.
Ontario Teachers’ Pension Plan, Capital International Group, Tiger Global and General Atlantic declined to comment. NSE and Goldman Sachs did not respond to ET’s emailed queries.
However, a source close to Tiger Global said the US fund is likely to continue as a shareholder in the exchange.
NSE has revived its listing plans that were stalled due to litigation against the exchange in the colocation matter. The NSE reached out to the finance ministry and the Securities and Exchange Board of India (Sebi) seeking their opinion about its plan to restart the IPO process, ET reported on December 13 last year.
NSE MD Vikram Limaye had said that the exchange is looking to float the IPO in the third quarter of this year subject to approval from market regulator.
The transaction is expected to value the exchange at around Rs 45,000 -50,000 crore.
The entire IPO would be offer-for-sale (OFS), where existing shareholders will sell NSE’s shares.
In February 2017, NSE’s rival BSE raised around Rs 1,243 crore through a public issue.
“NSE being the largest stock exchange will have a big share in India’s financialization of the economy,” said Ajay Bodke, CEO – PMS at Prabhudas Lilladher. “It makes sense for any global investor to buy a stake from the secondary market at a fair value. Such a move helps capture listing gains or yields significant returns if the stock appreciates over the medium-term.”
India’s largest lenders had invited bids to sell one percent stake in NSE, ET reported on January 22 earlier. They received 13 bids.
About 50 lakh shares were on offer, but bids for 35 lakh were accepted. Bids over Rs 1,000 apiece were successful, dealers involved in the exercise said.
Several state-owned lenders have, over the years, divested their non-core investments in the NSE, given the high liquidity of the company’s shares despite the firm’s unlisted status.
