Billionaire investor George Soros has picked up a 4 per cent stake in the Asia’s oldest bourse Bombay Stock Exchange (BSE) for about $35 million (over Rs. 160 crore).
Soros’s Quantum hedge fund bought the stake from Dubai Financial, a part of the state-run Dubai Holdings, for an estimated Rs. 380 per share, sources said.
With a total of 10.4 crore shares, the deal at Rs. 380 per share values BSE at over $800 million (Rs. 3,952 crore). Over 5,000 companies are listed on the exchange.
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Currently foreign investors hold a 30 per cent stake in BSE, lower than the permissible limit of 49 per cent.
While the BSE declined to comment on the deal, sources said the process of stake sale was started by Dubai Financial around 6 months back.
“Dubai Financial had appointed merchant bankers for the BSE stake sale six months back. A host of foreign funds had expressed interest. Finally, Soros’s Quantum outbid others,” sources said.
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Dubai Holding is a group owned by Emirates ruler Sheikh Mohammed bin Rashid al-Maktoum.
In February-March 2007, Deutsche Boerse AG and Singapore Exchange Ltd acquired 4.98 per cent each of BSE’s stake at the time when the exchange was demutualised.
As per the regulations, an institution cannot hold more than 5 per cent stake in a stock exchange. Among other foreign shareholders, the Deutsche Boerse and the Singapore Stock Exchange own 5 per cent stake each in BSE.
Foreign interest in India’s financial markets has been growing in recent past.
Earlier this year, Singapore government’s investment arm Temasek picked up a 5 per cent stake in the National Stock Exchange — the BSE’s main rival.
Temasek had acquired stake in the NSE from the New York Stock Exchange, which exited from India’s top bourse after the later entered into a cross-listing agreement with the Chicago Mercantile Exchange.
Under the agreement between the NSE and CME, S&P Nifty-50 index has been made available to the CME for the creation and listing of the U.S. dollar-denominated futures contracts for trading on the CME.
On the other hand the Dow Jones Industrial Average (DJIA) and S&P 500 — the two leading U.S. indices — would be traded on the NSE platform in India. The CME owns the rights to S&P and DJIA and has given the licence to the NSE for trade in futures contracts on indices.