NSE, BSE near deals to cut stakes in depository arms

NSE has around 25% in NSDL, while BSE's holding in CDSL is around 54%

The country's leading stock exchanges, the National Stock Exchange (NSE) and the BSE, are in an advanced stage of talks with investors for selling their shareholdings in National Securities Depository Ltd (NSDL) and Central Depository Services India Ltd (CDSL), respectively.

NSE has around 25 per cent stake in NSDL, while BSE's holding in CDSL is around 54 per cent. The deadline for cutting the stake to at least 24 per cent, set by stock market regulator Securities and Exchange Board of India (Sebi), ended last month. Both exchanges are in separate talks with institutional investors, including Life Insurance Corporation of India (LIC), to sell their holdings.

"We are talking with a few and (are) in an advanced stage for diluting about one per cent," said a NSE spokesperson. The one for BSE declined to comment.

According to sectoral sources, both NSDL and CDSL are valued in excess of Rs 1,200 crore each. BSE, which has to dilute 20 per cent in CDSL, is also considering an Initial Public Offer of equity for CDSL.

The Sebi board in April 2012 had approved the barring of a single stock exchange having more than 24 per cent in a depository. The regulator had given three years to NSE and BSE to comply. Sources said both exchanges had informed Sebi about their divestment plans, with the deadline having ended.

For the year ended March 2015, NSDL had a consolidated profit of around Rs 52 crore on revenue of Rs 160 crore. CDSL had profit of Rs 43 crore on a top line of Rs 105 crore.

Currently, IDBI Bank is the biggest shareholder in NSDL, with a stake of 30 per cent. After BSE, the second-biggest shareholder in CDSL is State Bank of India, with 9.57 per cent.

NSDL and CDSL provide depository facilitates that enable holding of securities in an electronic or dematerialised form. They together account for a little over 24 million investor accounts and assets under custody worth around Rs 130 lakh crore.