IFCI postpones NSE stake sale

IFCI, the Delhi-based government finance company, has postponed its plan to divest 2.5 per cent stake in the National Stock Exchange (NSE). According to two sources in the know of the matter, lower-than-expected bids from investors have forced the company to postpone its plan.

IFCI had announced in June that it proposed to engage a consultant to “advise and manage” the partial divestment process. PowerhouseCoopers (PwC) is said to be handling the transaction. An email sent to a PwC spokesperson did not elicit a reply.

“With a view to unlock the value of its strategic investments, IFCI intends to disinvest its equity shareholding (direct) in the NSE to the extent of 112,500 equity shares (2.5 per cent out of its shareholding of 5.55 per cent),” according to a PwC note on the divestment reviewed by Business Standard.

IDFC was reported to have sold a portion of its stake in the NSE in 2013. The sale is said to have been at a price of Rs 4,200 per share.

At the same price, it would have fetched IFCI about Rs 500 crore. The plan might be reviewed in a month’s time, said one of the sources. The IFCI stake sale was to be concluded by September 30.

IFCI has been working to unload a number of its non-strategic investments. On September 22, the company announced plans to partially sell its stake in the Tourism Finance Corporation of India Limited in the current financial year. It also previously announced plans to sell its entire stake in capital market subsidiary IFCI Financial Services Limited. It had been trying to integrate operations between IFCI Financial Service and Stock Holding Corporation of India (SHICL). It held 52.86 per cent in SHCIL after it completed the acquisition of stake in March this year from IDBI Bank for an undisclosed sum.

The largest stakeholder in the NSE is the Life Insurance Corporation of India (holds 10.51 per cent stake), followed by the State Bank of India (10.19 per cent), according to the NSE annual report.

IFCI held 5.55 per cent, while IDFC held 5.33 per cent in the country’s largest exchange. Other stakeholders include SHICL, GA Global Investments Limited, GS Strategic Investments Limited, SAIF II SE Investments Mauritius Limited and Aranda Investments (Mauritius) Pte. Ltd - all with five per cent each.

The NSE’s income rose from Rs 887.95 crore in the financial year ending in March 2013 to Rs 998.95 crore in March 2014. It had a net profit of Rs 937.97 crore compared to Rs 841.79 crore the previous year.

The exchange and IFCI did respond to the emails sent by Business Standard.