The Securities and Exchange Board of India (SEBI) has directed the National Stock Exchange (NSE) to submit a plan for diluting its entire stake in Computer Age Management Systems (CAMS) — the country’s largest share registrar and transfer agent (RTA).
The stock exchange had about 37% stake in the RTA and had told SEBI it would not be able to divest completely at once and hence would soon be submitting a road map for diluting the entire stake for the necessary regulatory approvals, a senior SEBI official said.
“The exchange has said that there are practical issues in divesting the entire stake at one go. So, we told them to submit a road map for divestment that we can approve,” the official said, adding that the bourse was yet to submit its plan of action for the stake sale.
The latest development follows the SEBI directive of February, wherein the watchdog stated that NSE acquired the stake in CAMS without prior regulatory approval and hence needed to divest the stake. “SEBI, vide its letter dated February 4, 2020, has inter alia noted that NSE should have obtained prior permission of SEBI for acquisition of stake in Computer Age Management Services Limited (CAMS), an associate company, through its subsidiary namely NSE Investment Limited in FY 2013-14 and has directed NSE to divest its stake in CAMS within a period of one year including certain restrictive directions in relation to the said stake in CAMS. The company is doing the needful in this regard,” said NSE, as part of its financial results statement for the period ended December 31, 2019.
Interestingly, CAMS, which has a market share of nearly 70%, has already filed its document for an initial public offer, which is likely to be around ₹1,500 crore in size. Once the draft document gets the final regulatory approval, the promoter shares, which includes NSE’s stake, get locked in for one year, which could derail the stake sale process of NSE to comply with the SEBI directive.
“We will take a considerate view on the matter so that none of the processes gets delayed,” the SEBI official quoted above said.
Apart from NSE, the major shareholders of CAMS include Warburg Pincus, Faering Capital, ACSYS Investments and HDFC Group.
