The New York Stock Exchange (NYSE), investment bank Goldman Sachs and two other global investors bought 20% of India's National Stock Exchange in separate purchases, the bourse said Jan. 10. NYSE acquired its 5% share of the $2.3 billion exchange for $115 million, said NYSE Chief Financial Officer Nelson Chai, calling the purchase a "strategic" move.
"We believe the markets will globalize. We believe we will be a leader in the global market," Chai said in the Indian capital New Delhi at the signing of the merger agreement. "For us to be a leader you cannot ignore the Indian market."
The other 5% stakes were acquired for much the same "ballpark figure," Ravi Narain, managing director of India's National Stock Exchange (NSE) said, without disclosing actual numbers. The figure would put the entire deal at approximately $460 million.
The shares were purchased from five Indian institutions, including ICICI Bank, the Industrial Finance Corp. of India, ILetFS Trust, Punjab National Bank and the General Insurance Corp. of India.
The Indian government, which issued new guidelines on overseas investment in Indian exchanges at the close of 2006, has capped the stake of individual investors at 5%, and limited direct foreign ownership to 26%. But funds that invest through listed shares are allowed to own another 23% for a maximum of 49% overseas investment.
Copyright Agence France-Presse, 2007