Singapore's sovereign wealth fund Temasek Holdings will acquire a 5 per cent stake in the National Stock Exchange of India (NSE) from the American exchange NYSE Euronext.
NYSE had acquired the stake in the NSE in 2007 for $115 million, valuing the premier Indian bourse at about $2.3 billion.
Although Temasek did not reveal the value of the acquisition, media reports suggested that the Singapore wealth fund has paid around $150 million, valuing NSE at approximately $3 billion.
"Temasek continues to focus on investments in India and believes in its long-term potential. We see our investment in NSE as a good proxy to India's economic growth and the development of its capital markets," Manish Kejriwal, senior managing director, Temasek, said in a media statement.
This is Temasek's second investment in India in less than a month. In April 2010, it invested Rs883 crore ($200 million) in GMR Energy to help the Indian company expand its power generation capacity. (See: Temasek infuses Rs883 crore in GMR Energy's expansion)
Founded in 1992, NSE has become the premier bourse in India overtaking the 135 year-old Bombay Stock Exchange (BSE).
NSE now has about 1,470 listed companies with a daily turnover of $3.2 billion, three times to that of the BSE and has a market capitalisation of about $1.3 trillion, making it the second largest stock exchange in South Asia.
It is also the third largest stock exchange in the world in terms of the number of trades in equities and the second fastest growing stock exchange in the world.