The US-based private equity firm Norwest Venture Partners today said it would pick up a little over 2 per cent stake in NSE, the country's largest stock exchange in terms of trading volume, for about Rs 252 crore (Rs 2.52 billion), valuing the bourse at over Rs 12,000 crore (Rs 120 billion).
The equity firm has signed a definitive agreement to acquire 2.11 per cent stake for a consideration of about Rs 252 crore (Rs 2.52 billion) in the National Stock Exchange of India Ltd, Norwest Venture Partners said.
This would be the first FII investment under new policy subject to the regulatory approval, it said.
The stake will be transfered by IL&FS Securities Services Ltd, a wholly-owned subsidiary of Infrastructure Leasing and Financial Services Ltd.
"The valuation accorded to NSE reflects its standing in global markets and the deal would close by the next week," NVP India managing partner Sohil Chand told PTI.
While exchange valuations have dropped dramatically in all developed markets, NSE remains well regarded in terms of quality of operations, management and growth, he said.
It would be recalled that in November 2008 the ministrycof finance had clarified that foreign institutional investors ould hold up to 23 per cent of the equity in an Indian exchange, even if such exchange was not listed.
The notification by the government has cleared the way for enhanced FII interest in NSE, with NVP being the first FII to take advantage of this investment opportunity, Chand said.
He said the Indian market continues to show great potential and the fundamentals of the economy are strong.
NVP is pleased to align itself with the largest stock exchange in India, whose entrenched market position, high liquidity, and national network footprint are incomparable, and future growth opportunities are extremely promising, he said.
It is excellent proxy to the growth in India, he said, adding that the investment horizon is about 5 years.
This transaction has been approved by the NSE board of directors, Chand said.
"We are extremely bullish on the value proposition NSE offers shareholders at a time when India is on the cusp of global influence. We look forward to working with Ravi Narain, MD, and his talented team of executives to help contribute to the growing success of NSE," he said.
Goldman Sachs, US-based General Atlantic and Softbank Asian Infrastructure Fund of Hong Kong along with the New York Stock Exchange in 2007 picked up 20 per cent stake together in NSE for a valuable consideration of $490 million (about Rs 2,300 crore).
