BackNSE withdraws directorship in CAMS, set to divest 12.5% in IPO
NSE had received a letter from Sebi in Feb, stating that it did not seek its nod to acquire a stake in CAMS in 2013
PremiumThe National Stock Exchange of India (NSE) has decided to withdraw directorship in Computer Age Management Services Ltd (CAMS) and divest 12.5% of its 37% stake in CAMS’ proposed initial public offering (IPO), as per the NSE’s annual report for FY20, following a Securities and Exchange Board (Sebi) directive. The NSE will subsequently exit from CAMS, it said.
CAMS is expected to launch its IPO this fiscal year. The company backed by NSE and Warburg Pincus LLC had received Sebi’s approval for its draft prospectus in July and hopes to raise ₹1,500 crore.
In the IPO, existing shareholders will sell 12 million shares, of which around 6 million shares will be from NSE, while Warburg Pincus will offload 4 million shares.
The NSE had received a letter from Sebi on 4 February, stating that it did not seek the market regulator’s permission to acquire a stake in CAMS in 2013, through its wholly owned subsidiary NSE Investments Ltd (NSEI), formerly NSE Strategic Investment Corp. Ltd. This was in violation of Stock Exchange and Clearing Corporation (SECC) Regulations.
Sebi has initiated action against the exchange for violating SECC Regulations while making this investment. It noted that NSE was engaged in activities that were unrelated or not incidental to its activity as a stock exchange, without making a separate legal entity and for making the investment without the regulator’s nod.
Sebi had directed NSE to divest its entire stake in CAMS within one year, withdraw its directorship in CAMS and not exercise voting rights or avail corporate benefits with respect to the shareholding.
Following this, “NSE has withdrawn its nominee directors in CAMS. During the year under review, NSEI decided to offer 12.5% stake in CAMS in their proposed IPO. The company aims to divest its remaining stake in CAMS as well," it said in the annual report.
NSE, which has a 37% stake in CAMS, had to sell the entire stake before the IPO, else the shares would have been locked in for at least a year after IPO.
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!
