Indian Bank, one of the leading state-run lenders in southern India, will increase its stake in the National Stock Exchange (NSE). At present, the bank holds 0.52% stake in NSE, the country?s largest bourse in terms of turnover.
Bank sources told FE, ?There is an investment opportunity in the NSE, which will bring economic value to the bank and its shareholders. Of course, the bank will stick to the Reserve Bank of India guidelines.? The move follows Securities & Exchange Board of India and the ministry of finance asking stakeholders not to hold more than 5% in stock exchanges. The stakeholders include persons acting in concert.
The enterprise value of NSE is about Rs 12,500 crore. An NSE share was worth Rs 2,778 on Thursday.
NSE stakeholders that have more than 5% will have to part with their extra shares after the Sebi and the finance ministry missive. But the offer to sell would have to made to existing members first. The sources said Indian Bank was counting on the ?first right of refusal? by existing shareholders to push up its stake.
On Thursday, Financial Technologies India Ltd (FTIL), the parent company of the
Multi Commodity Exchange (MCX), bought 1% in the NSE, or 4.5 lakh shares.
This it did by buying the shares from ICICI Bank for Rs 125 crore. Other major shareholders of the NSE include Life Insurance Corporation of India (12.44%), State Bank of India (10.94%), IDBI Ltd (10.99%), Goldman Sachs and New York Stock Exchange (NYSE).
NYSE and Goldman Sachs, along with General Atlantic Partners and Soft Bank, bought 5% each in the NSE in January.