Barely two weeks after the Reserve Bank of India permitted 49 per cent foreign stake in stock exchanges, the divestment of 20 per cent stake in the National Stock Exchange is seen as a strong signal attracting more foreign investment into the country.

Global investors Goldman Sachs Group, New York Stock Exchange Group as well as General Atlantic and Softbank Asian Infrastructure Fund will each buy 5 per cent stake from NSE shareholders such s IFCI, ICICI Bank and insurance major GIC.

"The proposed stake sale of the NSE is seen as a significant milestone for the Indian economy as yet again international players have indicated that India is one of their favourite investment destinations. In our view, it further consolidates India's global importance on the economic front," Sandeep Sharma, head - India private banking, SG Private Banking said. He also saw the move also is a corollary of the wave of consolidation, which is sweeping global exchanges.

The RBI had permitted 26 per cent foreign direct investment and 25 per cent foreign institutional investment into domestic bourses, putting individual cap of 5 per cent on foreign investors.

"It is a positive signal for country's economy. It is a validation of the NSE as well as Indian economy. Despite, the cap, big names like Goldman Sachs showed interest in buying the stake, means they are confident of growth coming from India," Manish Kanchan, CEO, Ambit Capital said.

The government is expected to clear further its position on attracting more foreign investment in the coming Union Budget for 2007-08, which would be presented on February 28.

Emphasising need to raise investments, Finance Minister P Chidambaram on Tuesday called up for increasing investments through all channels including private equity, participatory notes, venture capital, FDI, FII and hedge funds.

Earlier, after the RBI capped the stake owned by single foreign investors at 5 per cent, analysts had expressed it could hurt the divestment proposals as global investors normally seem to be incurious in picking up small stakes.