By Joydeep Ghosh
The National Stock Exchange (NSE) is planning to get out of businesses that are not part of its core operations as a stock exchange and regulator.
While NSE declined to comment, sources close to the development said that NSE has already identified a few companies and sent a proposal to its board for approval to sell these companies in a phased manner.
NSE has 11 group companies at present. These include NSE Academy, NSE Clearing, NSE Data and Analytics, NSE Foundation, NSE Indices, NSE Investments, NSE International Exchange, NSE International Clearing, NSEIT, NSE Infotech and NSE Cogencis.
Sources said in the past few years, NSE and its group companies have bought a majority or full stake in a number of companies. These include data and analytics firm, Cogencis, a cloud-based service provider, Cloudxchange and deep-tech education firm TalentSpirit, among others.
Sources said the exchange management believes that being saddled with too many companies creates additional issues, as they have to participate actively in the operations of these companies. “Anyway, we have a massive role to play as the country’s largest exchange. The new management has decided to focus on existing operations,” said a source, adding that they don’t see any reason to have stakes in companies that don’t add any value to their business.
The move may be perceived as an attempt to rejig the country’s biggest stock exchange which has been hit by a number of scams that occurred between 2009-17, including the co-location scam, illegal phone tapping and snooping on NSE employees, among others. NSE’s former MD & CEO Chitra Ramakrishna, and former vice-chairman Ravi Narain, are facing a slew of charges from various investigative agencies for these cases and were also jailed for some time.
The controversies put paid to NSE plans to go for an initial public offering (IPO). And as things look now, the IPO will have to be deferred for a few more years.
Sources attribute the ‘trimming down’ of the portfolio of companies to the fact that NSE’s basic purpose is not to earn big profits by expanding its business.
Moreover, the various legal cases have reportedly put the bourse’s top management under significant pressure, as various investigative agencies continue to seek information and data on these cases. And most are finding it quite difficult to deal with the deluge of questioning from different investigating officials.