Urbana Corp., a Canadian investment fund led by Thomas Caldwell that buys shares in stock exchanges, has scrapped plans to sell as much as $52 million in equity/convertibles to buy a stake in National Stock Exchange of India (NSE). This comes less than one month after it announced that is looking to pick upto 5% stake in NSE for around $130 million (Rs 625 crore) valuing the equity bourse at $2.55 billion. The deal was to be partly be funded through a share sale by Urbana Corp.

Part of Caldwell Investment Management, Urbana changed its plans due to what it termed as "current market conditions" as it would lead to too much dilution for shareholders of Toronto-based Urbana.

It had last month said it would issue share and warrants to part fund the deal to diversify exposure in India. "We would never do a financing at these levels were it not for the opportunity," Thomas

Caldwell was quoted as saying last month. Caldwell, which already owns 4% stake in Bombay Stock Exchange, the older rival of NSE, was planning to buy stake from existing shareholders of NSE.

But the group has not scrapped plans to buy stake in NSE and Caldwell said that the group still has an interest in India and may look to postpone the deal or consider other means to finance the transaction. Besides BSE, Urbana also owns equity in NYSE Euronext and the Chicago Board Options Exchange.

This deal would have valued NSE slightly ahead of the valuation struck by Norwest Venture Partners. The VC firm had last month announced that it will buy 2.11% of NSE for Rs 250 crore ($53 million) from IL&FS Securities Services, valuing NSE at $2.5 billion.

NSE, an electronic national bourse which started in 1992, has two times the trading volume of 134 years old cousin BSE, despite having lower number of firms listed compared to BSE. NSE has more than half the market share in equity trading but simply dominates derivatives trading in the country due to heavy trading by institutional investors. NSE’s investors includes NYSE Euronext, which bought a 5% equity stake for $115 million in 2007, besides Goldman Sachs and



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