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.