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Norwest Ventures acquires 2.11 percent stake in NSE
By siliconindia
250 crore. The stake has been purchased from L&FS Securities Services (ISSL), one of the stakeholders of NSE, at 2, 650 per share, Mint reports.
At this price, the National Stock Exchange has been estimated at a value of 11, 925 crore.
NVP has become the first investor to invest on stakes in an Indian exchange through the Foreign Institutional Investor (FII) route.
"A large part of our efforts is on growth equity deals in the $15-50 million range, with $50 million being the exception than the norm," said Sohil Chand, Managing Director, NVP India.
According to the Indian law, the FII can hold up to 23 percent in an exchange while investments through the Foreign Direct Investment (FDI) route can be a maximum 26 percent, limiting the overall foreign investments in exchanges at 49 percent. Within the overall cap, no single investor can hold more than five percent.
NSE Foreign Direct Investment (FDI) limit was sapped more than two years before, when a bunch of investors had taken up 26 percent of its stake for 2,566 per share.
NSE's price-earnings (P-E) multiple, a measure of how much investors are willing to pay for a share, stands at 22.87, calculated on the basis of the price NVP paid and earnings for the year ended 31 March 2008, as per the latest available.
Meanwhile, Asia's oldest stock exchange and NSE's main rival, the Bombay Stock Exchange (BSE), had a P-E of 26.32, calculated on the basis of the price paid for the last two reported stake sales and earnings for the year ended March 2008.
BSE had sold 5 percent each to Deutsche Boerse AG and Singapore Exchange, in February and March 2007, respectively, at a price of 5, 200 per share.
The NSE had an early start over the rival BSE, in the currency futures. The 133-year-old BSE launched currency futures last year in October, in a renewed effort to catch up with 16-year-old rival NSE. In the cash segment, where shares change hands, BSE had the first-mover advantage. And in the futures segment, both exchanges started simultaneous trading in June 2000.