BoB to trim stake in NSE for at least ₹661 crore

A request for proposal issued by the bank has set a floor price that values India’s largest bourse at ₹1.56 trillion, way beyond rival BSE, which is valued at ₹7,790 crore.

The public sector bank has invited offers from eligible categories, including insurance companies, corporates, mutual funds, banks, public sector units, foreign institutional investors, non-resident Indians, and high-net-worth individuals to bid for 2.1 million shares amounting to 0.42% stake at a minimum of ₹3,150 a share, valuing its NSE holding at ₹661.5 crore. Partnerships are, however, not eligible to bid.

The last date to submit bids is 10 July, while pre-bid queries will be entertained between 5 and 15 June. The bids will be opened on 11 July.

The auction comes at a time strategic foreign investors have offloaded some of their holdings in NSE, even as retail investors have raised their combined stake to 7.37% in the March quarter from 6.7% in the preceding quarter. Foreign investors as a strategic category, cut their overall holding by 1.35% to 25.71% during the quarter.

Prominent among those who booked profit were venture capital firm SAIF II SE Investments Mauritius, which pared its stake to 1.38% from 1.77% in the previous quarter, and private equity firm Acacia Banyan Partners, which cut its stake to 1.58% (2.5%).

The profit-booking by institutions comes even as the price of unlisted NSE shares has moved in the range of ₹2,800-3,200 over the past year, ahead of an anticipated listing, said Rajesh Baheti, managing director of broking company Crosseas Capital.

“The picture on NSE’s much-awaited listing will become clearer after the SC ruling on Sebi’s appeal against an SAT order on the co-location case," said Baheti. “To me, that’s the only hurdle left to be cleared. Until then, those holding unlisted shares have been booking profit on some of their holdings through auctions or through institutional brokers."

The Securities and Exchange Board of India (Sebi) in April 2022 ordered NSE to disgorge ₹624 crore on its alleged role in the co-location scandal. The Securities Appellate Tribunal (SAT) in January set aside the order with some conditions, prompting Sebi to approach the Supreme Court in March.

Speaking after announcing the quarterly earnings of NSE in May, Ashishkumar Chauhan, managing director and CEO, said the exchange was awaiting Sebi approval for its listing process. He added that once the approval for the IPO comes through, the NSE board will decide on the listing plan.

The public share sale of NSE is eagerly awaited, as it is the country’s largest bourse, with some early investors looking for an exit. In the absence of an IPO, institutions holding the shares have been transacting in the unlisted market. Here too, the transfer of shares has to be approved by NSE, going by the Sebi mandate that only a ‘fit-and-proper’ entity can hold the shares of a market infrastructure institution like NSE. This process normally takes three to four months, but Chauhan said it would be streamlined to less than a week.

gopika.g@livemint.com