India’s largest lender, State Bank of India (SBI), received bids from Prem Watsa’s Fairfax, Edelweiss Securities and Kotak Securities, among others, to buy 1% stake in National Stock Exchange (NSE), three people aware of the development told The Economic Times.
Close to 13 bidders have shown interest to invest up to Rs 530 crore ($74 million at current exchange rate) in the bourse. Fairfax submitted a bid of Rs 500 crore to buy all the five million shares up for sale, the report said.
The state-owned lender is unwilling to sell the shares at a price lower than Rs 1,000 apiece, one of the persons cited above said. In the run-up to the exchange’s initial public offering, SBI, United India Insurance, Union Bank of India and Indian Bank are selling their stake with expectations that the IPO could value the bourse at Rs 1,200 per share at a valuation of Rs 60,000 crore.
Separately, Anil Agarwal-led Vedanta is looking to sell a minority stake in the country’s largest private sector oil and gas producer Cairn India as the diversified oil-to-metals conglomerate looks to support its capex plans as well as reduce its $6.6 billion (Rs 46,500 crore) debt.
Vedanta may look to dilute up to 25% to raise up to $2 billion (Rs 14,100) through the transaction, people aware of the matter told The Economic Times.
Occidental Petroleum, ConocoPhillips and ExxonMobil of the US, ENI of Italy, Petronas of Malaysia and Abu Dhabi National Oil Company are likely to be tapped.
Talks are at an early stage and may not result in a deal, the people said, adding more suitors may emerge.
Over 12 months, the Vedanta stock has dropped 22% compared with a 13% rise of the Sensex.
“The past few quarters have been that of operating misses for Vedanta as expansions have not ramped up in India zinc business, Gamsberg and India oil, and projects have been delayed,” said Pinakin Parekh, an analyst of JPMorgan, in the report.
There are headwinds for Cairn too including an ongoing Rs 10,247 crore tax litigation against Cairn Energy PLC over India business reorganisation years back. Also, Cairn is seen as a single-asset-heavy company.