 "NSE board meets to finalise bankers for its IPO")
Banks such as Kotak, Citi, ICICI Securities, JM Financial, Goldman Sachs, and Morgan Stanley are likely to be selected, said sources familiar with the development. Bank of America Merrill Lynch, IDFC Capital, UBS, Credit Suisse and JP Morgan were also said to be in the reckoning. The exchange had invited final pitches from merchant bankers last week.
Several of these banks are also investors in the exchange. For instance, Goldman, Morgan Stanley and Citi hold a five per cent, three per cent and two per cent stake respectively, in the exchange through their respective investment arms — GS Strategic Investments (Mauritius), MS Strategic (Mauritius), and Citigroup Strategic Holdings Mauritius, the shareholding pattern for June shows.
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Asia’s oldest bourse, BSE, has already appointed seven merchant bankers — Edelweiss Financial Services, Axis Capital, Jefferies, Nomura, Deutsche Bank, Motilal Oswal and SBI Capital Markets — to handle its IPO. BSE is looking to raise anywhere between Rs 400 crore and Rs 1,200 crore from the IPO. NSE's issue size is expected to be larger.
An email and a text message sent to NSE did not immediately get a response. The NSE board had in a meeting on June 23 given its nod to list in India and overseas. The exchange had said it would file a draft prospectus with market regulator Securities and Exchange Board of India (Sebi) by January 2017 for domestic listing, and another one for overseas listing by April next year.
The exchange had earlier been criticised by some of its shareholders for the delay in listing. On January 1 this year, Sebi notified its amended SECC norms, after which NSE began lobbying for self-listing, arguing that self-listing was a common practice internationally. In February, the exchange board met and discussed a foreign listing in addition to listing in India, after which a listing committee was formed to accelerate the process of going public.
While it was adamant on a self-listing, it toned down its stance later, saying it was okay with listing on rival BSE if all mandatory disclosures were allowed to be directly sent to either Sebi or another regulatory body. Current Sebi norms do not allow a stock exchange to list on its own platform.
According to an earlier report by Business Standard, the NSE could get a premium valuation compared to global peers, due to higher growth potential in India. Mauritius-based Veracity Investments recently acquired a five per cent stake in NSE from State Bank of India for Rs 911 crore, valuing the exchange at Rs 18,200 crore.
BSE gets good response for its offer
BSE has received a good response for its offer for sale (OFS), with shareholders tendering a little less than 30 per cent of the exchange’s total equity share capital during the tender process, said sources. The exchange is likely to file its draft prospectus by mid-September. The issue size is expected to be close to Rs 1,200 crore, based on percentage of shares tendered and assuming a share price of Rs 400 apiece.
Shareholders had to give a consent form, a notarised power of attorney and deposit their shares in an escrow account by August 22 for the OFS. BSE had earlier said that it would offload up to 30 per cent stake before end-March 2017 through an OFS, along with a possible fresh sale of shares. The exchange will not be required to issue fresh shares now as it has managed to dilute more than 10 per cent of equity through the OFS, as mandated by current regulations.
Shareholders were given the option of offering all or part of their shares in the offer, provided the shares were held for a continuous period of one year prior to filing of the draft prospectus with Sebi.