Azim Premji's private equity firm PremjiInvest has picked up a 3% stake in National Stock Exchange for $100 million. The deal values the bourse at $3.3 billion and the deal was stuck some time back, reports Business Standard. However, highly placed sources told VC Circle that the valuation of NSE is $3.9 billion and not $3.3 billion.
Till Monday this week, SEBI regulations said no single shareholder can hold more than 5% of the equity in an exchange. The existing shareholders having more than 5% stake were given a September deadline to pare off excess holding. The stake sale to Hero Honda and Srei Infrastructure Finance by IFCI and Stock Holding Corporation of India (SHCIL) was also a part of this process.
But on Monday, SEBI announced that certain six entities can hold upto 15%. Premji seems to have bought his stake before this announcement was made. Life Insurance Corporation, the State Bank of India, Infrastructure Development Finance Corporation and SHCIL were some of the institutions holding more than 5% stake.
In August this year, Hero Honda and Srei Infrastructure Finance also bought some stake in NSE which reportedly valued the exchange at close to $4 billion. The two corporates bought the shares at Rs 3,500 apiece in August this year. Premji bought his stake at a valuation of $3.3 billion, which seems to be lower. However, VCCircle does not have independent confirmation of the both the deal sizes.
Azim Premji seems to be upping the his number of investments as the economy slips into a slowdown. Last week Jagdish Khattar's Carnation, who is setting up a chain of multi brand auto distribution and services outlets, announced an investment of Rs 80 crore from Premji. Also last month ICICI Venture sold a 10% stake in retail chain Subhiksha to PremjiInvest for Rs 230 crore.