March 12, 2013

who owns nse (national stock exchange)?

Here is a story I did, three months back, in the newspaper I work for, on the shareholders of NSE (National Stock Exchange of India):

Corporate shareholders of NSE tinker with their holdings

The largest stock exchange in the country in terms of value of trades, National Stock Exchange of India (NSE), was witness to three significant and interesting changes in its own shareholding in the one year period up to September 27. NSE has a paid-up equity capital of Rs 45 crore.

A Financial Chronicle Research Bureau analysis of NSE's shareholding from its statutory filings with the registrar of companies revealed that Wipro's chairman and managing director Azim H Premji transferred his entire personal 3 per cent stake in NSE to his private investment vehicle PremjiInvest's PI Opportunities Fund 1. This took place in December last year. PI Opportunities is the 12th-14th largest shareholder in NSE along with Morgan Stanley's MS Strategic (Mauritius) and hedge fund Tiger Global Five Holdings, each holding 3 per cent stake in the exchange.

The other major change took place in the form of Bajaj Holdings & Investments acquiring a 1.25 per cent stake in NSE with the selling shareholders being Fidelity India Mutual Fund's schemes, which parted with their entire collective 1.08 per cent stake in July this year, and Hero Motocorp which offloaded its entire 0.17 per cent stake in June this year. The price at which these stakes changed hands is not known.

In the 1-year period, the third largest shareholder in NSE, Infrastructure Development Finance Company (IDFC), pared its holding by 1.32 percentage points from 7.88 per cent to 6.56 per cent. IDFC, however, continued to be the third largest shareholder in NSE after Life Insurance Corporation of India and State Bank of India which held 10.51 per cent and 10.19 per cent stakes respectively.

The buyers of this 1.32 per cent stake were five of US-based foreign institutional investor (FII) Wellington Management Company's sub-accounts, Bay Pond, Wolf Creek, Kirykos, Ithan Creek and Quissett. These stake buy-outs took place in November last year but the price they paid IDFC for it is not known.

In the year before, between September 2010 and September 2011, Wellington's various sub-accounts had collectively acquired 0.93 per cent stake from Financial Technologies (India). Those purchases took place at a price of Rs 3,800 per share for a value of about Rs 160 crore. With the latest November acquisition of 1.32 per cent, Wellington's various sub-accounts now hold 2.25 per cent in the country's largest stock exchange.

There were no other stake changes during the 1-year period upto September this year. In all, there were 64 shareholder entities and funds holding shares in NSE.

Interestingly, some large shareholders in NSE also held relatively large stakes in its rival, Bombay Stock Exchange. The most prominent examples are that of LIC and SBI, which were the third and fourth largest shareholders in BSE as of August this year with a 4.84 per cent stake each.

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