IFCI plans to off­load 1.21 mn shares in NSE

Business Standard - - MARKETS - SACHIN P MAMPATTA

Gov­ern­ment-con­trolled devel­op­ment fi­nance com­pany IFCI Ltd has in­vited mer­chant bankers to help it off­load stake in the Na­tional Stock Ex­change (NSE).

The com­pany is look­ing to sell 1.21 mil­lion of NSE shares (0.24 per cent stake). The deal is likely to be valued at ~1.05 bil­lion to ~1.11 bil­lion, based on the price-band of ~870-920 men­tioned in the ten­der.

“IFCI in­tends to sell part of its eq­uity share­hold­ing (0.24 per cent) in NSE, which ac­counts for 1,209,991 fully paid-up un­en­cum­bered eq­uity shares each of face value ~1. This will be done through a com­pet­i­tive bid­ding process,” said the ten­der doc­u­ment on the com­pany’s web­site. Pre­vi­ous ex­change an­nounce­ments show that IFCI sold stake in the bourse in three tranches in March. It raised 1.78 bil­lion through the three sales, which in to­tal amounts to 0.41 per cent in the ex­change.

The fi­nancer has been sell­ing as­sets in or­der to im­prove its bal­ance sheet as it strug­gles with as­set qual­ity is­sues. For ex­am­ple, it had sold stake in hos­pi­tal­ity in­fras­truc­ture fi­nancer Tourism Fi­nance Cor­po­ra­tion of In­dia (TFCI) in Septem­ber 2017. It has set a dead­line of Septem­ber 21 for the com­ple­tion of the lat­est stake sale. Busi­ness Stan­dard had re­ported ear­lier that an­other share­holder – pub­lic sec­tor lender IDBI Bank – was look­ing to exit through pri­vate deals due to a de­lay in the ini­tial pub­lic of­fer. The bank has also been in need of cap­i­tal be­cause of bad loans. It was later an­nounced that the Life In­sur­ance Cor­po­ra­tion of In­dia is ac­quir­ing stake and pump­ing in re­quired cap­i­tal into the lender.

NSE had filed for an ini­tial pub­lic of­fer in De­cem­ber 2016. Its pub­lic is­sue would have pro­vided an exit to many share­hold­ers. It has been held up on ac­count of a reg­u­la­tory probe into the bourse’s ac­tiv­i­ties.

The Se­cu­ri­ties and Ex­change Board of In­dia (Sebi) is look­ing into al­le­ga­tions that the bourse pro­vided un­fair ac­cess to some par­tic­i­pants. This also had a bear­ing on rev­enues.

“Sebi has di­rected that, pend­ing com­ple­tion of in­ves­ti­ga­tion to the sat­is­fac­tion of Sebi, all rev­enues em­a­nat­ing from the col­lo­ca­tion fa­cil­ity, in­clud­ing the trans­ac­tion charges on trades ex­e­cuted through the col­lo­ca­tion fa­cil­ity, be placed in a sep­a­rate bank ac­count. Ac­cord­ingly, as of March 31, an amount of ~11.97 bil­lion was trans­ferred to a sep­a­rate bank ac­count,” said a note to the ex­change’s lat­est fi­nan­cials.

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