State Bank of India wants the National Stock Exchange to go public

A file photo of the State Bank of India chairperson Arundhati Bhattacharya. Photo: Abhijit Bhatlekar/Mint

State Bank of India (SBI) chairperson Arundhati Bhattacharya said on Wednesday that the nation’s largest lender, which is also the biggest shareholder in the National Stock Exchange (NSE), wants the bourse to go public.

The SBI stand comes on top of similar demands by several private equity investors seeking an exit from the NSE, and adds pressure on the NSE management.

“We would like to exit some part of our stake in the exchange, but we would like to do it in a way where there is proper price discovery. Hence, we are keen that the exchange should list,” Bhattacharya said over the phone.

The SBI chairperson said the bank and its subsidiary SBI Capital Markets together hold nearly 15% of NSE, India’s largest stock exchange. Based on a transaction in September when IFCI Ltd sold 1.5% of NSE, the exchange was valued at Rs.17,550 crore. At the same valuation, SBI’s 15% shareholding is worth upwards of Rs.2,600 crore.

“It is not like we haven’t had offers for the shares, but we don’t think those were valued appropriately. We would like to see proper price discovery,” said Bhattacharya.

“We would certainly like to pare down some of that stake,” she said, adding the exchange’s plans for an internal restructuring can be implemented after the listing as well.

At a meeting on 23 November attended by all of its Indian and foreign shareholders, the NSE management said it would look at listing its shares on its own exchange, as opposed to the stock market regulator’s view that the shares should be listed on a rival exchange, also called a cross-listing.

Its second pre-requisite ahead of a listing is to create a holding company, under which the exchange business and the non-regulated businesses will be held as separate entities, Mint reported on 26 November.

“NSE board and management are moving towards listing. For some time, we had several rounds of fruitful discussions which included our stakeholders too. A broad guideline from Sebi has just come; a more detailed guideline is also expected,” an NSE spokesperson said.

On 1 December, the Securities and Exchange Board of India (Sebi) amended the existing stock exchanges and clearing corporations regulations to make it easier for stock exchanges opting for initial public offerings.

As part of the amendments, Sebi plans to allow individual shareholders to declare themselves as “fit and proper,” even though the regulator will monitor this closely.

Individual investors, even after declaring themselves fit and proper at the time of investment, would be scrutinized by Sebi and depositories, Mint reported on Monday.

Bank of Baroda, Indian Bank, Union Bank of India, Oriental Bank of Commerce, Punjab National Bank, Kotak Mahindra Bank and ICICI Bank own shares in the exchange, according to NSE filings with the Registrar of Companies.

For these banks, the ability to monetise their holdings in a manner where there is proper price discovery will be a relief.

Another investor in NSE who declined to be named, said that it was good to see the largest shareholder make its stand clear.

“They (SBI) have been leading the discussions, but it is good to see them publicly seek a listing,” he said.

Also Read:

India: National Stock Exchange delaying public listing, allege shareholders

Indian market regulator to set strict norms for investors in stock exchanges

India: Market regulator relaxes norms for stock exchanges to tap IPO route, list shares

This article was first published on Livemint

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.