The New York Stock Exchange (NYSE) along with three other investment bankers and private equity firms have collectively acquired 20 per cent stake in the National Stock Exchange of India (NSE) at an enterprise valuation of a whopping $2.5 billion or Rs 11,125 crore.
NYSE, private equity firm General Atlantic, investment banker Goldman Sachs, and Japan's Softbank Asian Infrastructure Fund have bought five per cent stake each from a consortium of Indian financial institutions — IFCI, ICICI Bank, Infrastructure Leasing & Financial Services (IL&FS), GIC and Punjab National Bank (PNB). The transaction is under the foreign direct investment route.
The RBI has allowed foreign investment of up to 49 per cent in stock exchanges, fixing the FDI cap at 26 per cent and the FII limit at 23 per cent. Market regulator SEBI has stipulated investment limit for single foreign investor at 5 per cent, beyond which an FII or any other investor, like a foreign stock exchange, will not raise its stake in stock exchanges.
NYSE has also entered into an exclusive non-competing agreement with NSE, under which it (NYSE) will not acquire stake in any other stock exchange in the country other than commodities exchanges, because of which the acquisition price for NYSE is slightly cheaper, sources close to the deal said. While the NYSE has acquired an enterprise valuation of $2.3 billion, other three investors have bought at an enterprise valuation of $2.5 billion.
The acquisition price was around Rs 2,260 per share. IFCI, which was holding 12.4 per cent stake in NSE before the deal, sold 7 per cent of it for a whopping Rs 779 crore. PNB sold 1 per cent for around Rs 102 crore and is still holding around 0.11 per cent stake.
ICICI Bank, which was holding 11.4 per cent, divested 5 per cent of it for around Rs 550 crore and IL&FS sold its 5 per cent for around Rs 550 crore. GIC sold 2 per cent stake for around Rs 205 crore. The entire deal was facilitated by IL&FS.