Foreign investors will now eye depositories

After the National Stock Exchange, the focus has now shifted to stake sale soon in two depositories, the National Securities Depository and the Central Depository Services.

Analysts said New York Stock Exchange and the US-based Goldman Sachs, which bought equity stakes in NSE, are likely expand their presence in the Indian financial infrastructure sector by acquiring stake in the NSE-promoted National Securities Depository Limited.

A likely move is expected soon considering that some existing stakeholders in NSDL are looking for selling a part of their stakes in the leading depository, sources said.

Since NSDL is owned by the NSE, it was only logical for NYSE to buy stake in the depository, which has a chunk of the depository business in India.

Following Wednesday's announcement, Goldman Sachs, in addition to holding stake in NSE, holds over seven per cent commodity exchange NCDEX, where NSE is a promoter.

The NSE-promoted NSDL has 12.7 per cent stake held by foreign investors viz., Citibank, Deutsche Bank, Standard Chartered Bank and HSBC.

Under the current regulation, foreign stake can go up to a maximum of 20 per cent. After a proposed amendment, foreign direct investment can go up to 26 per cent in depositories and foreign institutional investment can buy another 25 per cent.

Already, the Specified Undertaking of UTI is looking for buyers for its over 20 per cent stake in NSDL. It had recently sold a part of their stake in the depository to three public sector banks.

It is learnt that some other existing stake holders may also be looking for selling their shares in NSDL.

On whether SU-UTI would look to sell its stake in NSDL to foreign buyers, S B Mathur, administrator of SU-UTI said: "Till now, we have not received any government direction in this matter. But, we cannot take a decision on a matter like this without a government approval."

A senior official in NSDL said: "We are not in a position to know if any of the existing shareholders are looking to sell their stakes and the likely buyers.

CDSL stake: Similarly, BSE is considering an option to offload part of its equity in the depository it floated.

BSE has around 38 per cent equity stake, of which 5-10 per cent is likely to be divested to a strategic partner.

It is learnt that the foreign exchange which will get BSE stake before its proposed IPO will be offered the stake in CDSL as part of the package.

"International depositories are doing the work of clearing corporations. The synergy for offering stake in depository is that in future CDSL can get the outsourcing deal for clearing related work in the foreign exchange," said a source.

NYSE and Goldman Sachs are likely expand their presence in the Indian financial infrastructure sector by acquiring stake in National Securities Depository

The NSE-promoted NSDL has 12.7 per cent stake held by foreign investors, Citibank, Deutsche Bank, Standard Chartered Bank and HSBC

Under the current regulation, foreign stake can go up to a maximum of 20%