1% of NSE and 6% of MCX on the block

One of the domestic financial houses plans to sell 450,000 equity shares of the National Stock Exchange (NSE), amounting to 1 per cent stake in the largest exchange in India. Sources said that one of the banks might be offloading a part of its stake. The process has already started with SBI Caps Securities, the investment banker for this transaction, asking for bids from institutions. Sources indicated that Rs 3,600-3,650 per share is being sought by the offloading entity.

Recently, Stock Holding Corporation of India (SHCIL) sold 0.86 per cent of its stake in NSE. In June this year, US-based private equity firm Norwest Venture Partners picked up a little over 2 per cent stake in NSE for Rs 252 crore from IL&FS, valuing the bourse at over Rs 12,000 crore.

In yet another move, nearly 5.91 per cent of stake in the Multi-Commodity Exchange (MCX) is also on the block and SBI Caps Securities is looking for investors for the same. Sources said that it could be either Fidelity or Citigroup who were looking to sell their stake in MCX. Fidelity currently holds 9 per cent, while Citigroup and its allies hold 10 per cent in MCX. According to the Forward Markets Commission (FMC) norm, Fidelity and Citigroup need to bring down their stake to 5 per cent by March 2010. The other major shareholders in MCX are NYSE Euronext, Merrill Lynch, IL&FS, Bennett Coleman and a clutch of banks.

With the listing of exchanges not in sight, institutional investors were trying to book profits by offloading part of their stake, said experts. “Valuation has been a major hurdle for stake sales in exchanges. With a recent deal wherein IFCI picked up a 5 per cent stake in MCX-SX, valuing the exchange at Rs 5,000 crore, it has become all the more difficult. NSE with a dominant position in almost all market segments will obviously peg it much higher,” said a merchant banker with a foreign investment bank.