US firm Norwest buys 2.11 per cent stake in NSE

04 June 2009

California-based orivate equity firm Norwest Venture Partners (NVP) announced yesterday that it has entered into a definitive agreement with IL&FS Securities Services Ltd. for acquiring the 2.11-per cent stake it holds in India's National Stock Exchange (NSE) for around Rs250 crore.

Mumbai-based NSE, the country's largest stock exchange, is valued at Rs12,000 crore ($2.54 billion), which reflects its sound standing in global markets in terms of quality of operations, management and secular growth. The stock exchange has a two-thirds market share in the cash segment and 100 per cent in derivatives.

The all-cash deal settled at Rs2,650 per share of a face value Rs10, is likely to be completed by next week.

NVP said the valuations of NSE were at similar levels to January 2007, and the multiples were favourable compared to other regional exchanges.

The NSE board has given its approval for the transaction which is one of the biggest private equity deals this year.

NVP managing partner Promod Haque said in a statement, ''The NSE is regarded as one of the best operated exchanges globally, with world-class technology systems, a proven management team, and a wide range of products and industry leading processes that are unrivalled in the industry.''

The firm is extremely bullish on the value proposition NSE offers shareholders at a time when India is on the cusp of global influence.