PSU banks tie up to sell 11% in NSE

Less than a month after five financial institutions sold 20 per cent in the National Stock Exchange (NSE), a consortium of five stakeholders led by State Bank of India are looking to sell an 11 per cent stake in the exchange.

The other stakeholders are Indian Overseas Bank, Union Bank of India, Corporation Bank and IDBI.

The banks have mandated a leading investment bank to find buyers for a combined stake sale that fetched better valuations, sources close to the development said.

Several private equity players, including Blackstone and Actis, have shown interest in buying the stake. The stake sale move was confirmed by officials at Corporation Bank and Union Bank but denied by a senior IDBI executive.

On January 10, the New York Stock Exchange (NYSE), Goldman Sachs, General Atlantic and Japan's Softbank Asian Infrastructure Fund bought 20 per cent in NSE from a consortium of five domestic financial institutions.

IFCI sold 7 per cent for Rs 779 crore, while ICICI Bank divested 5 per cent for around Rs 550 crore. IL&FS also sold its 5 per cent stake for the same valuation, GIC sold 2 per cent for Rs 205 crore and PNB, 1 per cent stake for Rs 102 crore.

The sudden interest in NSE from foreign players comes after the Reserve Bank of India allowed foreign investment of up to 49 per cent in stock exchanges, fixing the foreign direct investment cap at 26 per cent and foreign institutional investor limit at 23 per cent.

Rules stipulate that no single entity can hold more than 5 per cent in a stock exchange.