Canadian firm may buy 5% in NSE, ropes in IL&FS

Canadian investment firm Urbana Corporation said it was looking to buy a 5 per cent stake in India’s largest bourse, the National Stock Exchange (NSE), for an estimated Rs 600 crore. Urbana’s investment firm, Caldwell Investment Management, has signed an agreement with financial intermediary IL&FS to identify banks and other institutional shareholders of NSE who are interested in selling their stake.

Earlier this month, another overseas fund, Norwest Venture Partners, had signed an agreement to acquire 2.11 per cent stake in NSE from IL&FS Securities Services for Rs 250 crore, valuing the exchange at over Rs 12,000 crore. Urbana, which already holds about 4 per cent stake in the Bombay Stock Exchange, is looking to raise funds in its home market through sale of shares and warrants to fund its purchase of the NSE stake.

“Urbana intends to use the net proceeds of the offering to purchase equity shares in NSE,” the Toronto-listed company said in its offer document filed with Canadian market regulator CSA.

The offer document said Urbana expected to acquire the stake within a reasonable time following closing of its current prospectus offering. However, it warned that “while Urbana intends to use the net proceeds of the offering to purchase equity shares in NSE, there can be no assurance that equity shares in NSE will be available for purchase after the closing of the offering or that Urbana will be able to buy such shares on terms acceptable to Urbana.”