NYSE exits NSE India investment with over 50% gains

As per various media reports, NYSE Euronext is believed to have sold-off its 5% stake in the National Stock Exchange of India after three years for $175 million.

The deal values NSE at $3.5 billion vs. $2.3 billion, when NYSE bought the stake in 2007.

In Jan 2007, the NYSE Group had reached an agreement to buy 5% stake in NSE for $115 million in cash from a consortium of selling shareholders, including ICICI Bank Limited, IFCI Limited, IL&FS Trust Company Limited, Punjab National Bank, and GIC of India. The deal closed in April 2007.

(The Indian government allows international investors to buy as much as a combined 49% in any of the nation's stock exchanges with a limit of 5% for a single investor.)
As of March 2010, there were 1,470 companies listed on the NSE with a combined market capitalization of Rs. 60 lakh crore. The average daily trading turnover on the exchange is currently around Rs 88,000 crore. (Ratio of Cash:FO - 15:85)

At the time of NYSE deal, there were 1,185 companies listed on the NSE with a combined market capitalization of Rs. 36 lakh crore. The average daily trading turnover on the exchange stood at Rs 40,000 crore. (Ratio of Cash:FO - 20:80)

Other points that are noteworthy:

The average daily turnover (CM segment) on the NSE is nearly 2.5x that of the BSE.

NSE generates more than 7x the business generated by the BSE. Transaction charges earned by the NSE are close to Rs. 500 crores a year.

NSE/BSE members are required to pay transaction charges on trades undertaken by them. The transaction charges (payable on every Rs. 1 lakh of turnover) are higher in the CM segment than on the F&O segment.

For the period ended March 31, 2009, NSE generated an income of Rs. 1,025 crore and a net profit of Rs. 516 crore compared to Rs. 1,039 crore and Rs. 521 crore, respectively, in the previous year.