BSE in talks to buy a majority stake in CAMS

BSE in talks to buy a majority stake in CAMS

Mumbai: The Bombay Stock Exchange (BSE), Asia’s oldest bourse, is in talks to acquire to a majority stake in Computer Age Management Services Pvt. Ltd (CAMS), a registrar and transfer agent, according to a person familiar with the matter.

Chennai-based CAMS processes mutual funds transactions and takes care of customer care for asset management companies and distributors. According to its website, it has a 50% market share of mutual fund transactions in India.

The company is a joint venture between HDFC Ltd, private equity firm Advent International Corp. and Chennai-based Acsys Software India Pvt. Ltd. Its website didn’t reveal the shareholding pattern and Mint couldn’t ascertain which shareholder(s) was selling to BSE.

BSE’s deputy chief executive officer (CEO) Ashish Chauhan declined comment as did the spokespersons for HDFC and Prabal Nag, vice-president of business development for CAMS. Acsys Software couln’t be reached for comment over the weekend. Advent also declined to comment.

For BSE, this will be yet another acquisition to consolidate its technology platform and services as it seeks to provide end-to-end solutions right from the exchange transaction to clearing and settlement.

Under the new management led by CEO Madhu Kannan, 38, the bourse has identified technology as one of the key areas to boost revenue and wrest market share from bigger rival National Stock Exchange of India Ltd.

To this end, BSE purchased Marketplace Technologies Pvt. Ltd in 2009. More recently, it set up Indian Clearing Corporation Ltd, and increased its shareholding in Central Depository Services (India) Ltd to a controlling stake of 54.5%. It also acquired a 15% stake in United Stock Exchange of India Ltd to provide a trading platform for currency derivatives besides launching StAR MF, a mutual fund trading platform.

For the quarter ended June 2010, BSE reported a 11% decline in net profit to Rs50.77 crore. Its revenue slid 1.8% to Rs113.6 crore.