Firms take $460m stake in India stock exchange

General Atlantic, Goldman Sachs, Softbank and the NYSE are buying a combined 20 percent stake in the National Stock Exchange of India.

A group of investors including General Atlantic, Goldman Sachs, Softbank Asian Infrastructure Fund and the NYSE Group will each purchase 5 percent stakes in India’s National Stock Exchange (NSE).

The NYSE, the parent company of the New York Stock Exchange, announced today that it paid $115 million (€89 million) for its stake. Based on this figure, the total value of the combined 20 percent stake is $460 million. The deal values the NSE at roughly $2.3 billion.

The NSE will continue to be led by Ravi Narain, the managing director and chief executive officer of Mumbai-based NSE.

The investment group is buying its stakes from five Indian institutions: ICICI Bank Limited, Industrial Finance Corporation of India Limited, IL&FS Trust Company Limited, Punjab National Bank, and General Insurance Corporation of India.

The investment is the maximum allowed under India foreign direct investment laws governing stock exchanges.

Greenwich, Connecticut-based General Atlantic already has a 5.3 percent stake in NYSE and a seat on its board. This was the result of a $125 million investment the firm made in Archipelago Holdings, which was subsequently acquired by the NYSE. The firm’s stake is now valued at roughly $680 million, according to a source close to the firm.

The $15 billion market-cap NYSE recently announced a plan to acquire the Euronext exchange.

In 2006, NSE had an average daily traded value of roughly $2 billion, and an equity derivatives trading value of $7 billion.