In one of the biggest private equity deals this year, Norwest Venture Partners (NVP) has picked up a stake in National Stock Exchange for Rs 250 crore.  The Silicon Valley headquartered fund has picked up a 2.11% stake in National Stock Exchange (NSE) from IL&FS Securities Services Ltd in a secondary transaction for Rs 250 crore. The deal has been done for cash, valuing the Mumbai-based exchange at over Rs 12,000 crore.

This deal has been approved by the NSE board of directors, and is expected to close within the next week. Ministry of Finance said in November 2008 that foreign institutional investors (FII) could hold up to 23% stake in Indian Exchange.

NSE got a valuation of $4 billion when Hero Honda and Srei Infrastructure Finance picked up a stake in it in August last year. In 2007, players like NYSE and private equity firms like SAIF Partners, Goldman Sachs and General Atlantic picked up a 5% stake each at a valuation of $2.3-2.5 billion. The stake was picked from a group of divesting investors who included IFCI, ICICI Bank, GIC, IL&FS and PNB. Another investor in NSE is Azim Premji's private equity firm PremjiInvest.

"The NSE is regarded as one of the best operated exchanges globally, with world-class technology systems, a proven management team, and a wide range of products and industry leading processes that are  unrivaled in the industry,” said Promod Haque, Managing Partner, NVP.

“The Indian market continues to show great potential and the fundamentals of the Indian economy are strong. NVP is pleased to align itself with the largest stock exchange in India, whose intrenched market position, high liquidity, and national network footprint are incomparable, and future growth opportunities are extremely promising,” said Sohil Chand, Managing Director, NVP India.

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