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Eyeing improved valuations for its holdings after the imminent listing of the National Stock Exchange (NSE) this fiscal year, state-owned IFCI has put on hold its partial-exit plan in Stock Holding Corporation, the country’s largest custodian of shares.
IFCI has also decided not to pursue sale of its remaining 3 per cent direct holding in NSE till the bourse gets listed sometime next year.
“We have put on hold our plans to sell a 26 per cent stake in SHCIL now that NSE has announced plans for listing,” Malay Mukherjee, Managing Director and Chief Executive Officer, IFCI, told BusinessLine here. The main reason for this decision is SHCIL’s direct holding of 5 per cent in the NSE. This holding is expected to command a higher valuation after the NSE listing and so IFCI has decided to put on hold its stake sale plan. “We are ready to wait. An NSE listing will boost the valuation of SHCIL,” said Mukherjee. As on date, IFCI holds a 53 per cent stake in SHCIL, which is also into depository and online stock trading services.
NSE had on June 27 this year announced that the exchange was moving towards a listing and planning to file an offer document for domestic listing by January next year. This bourse — the country’s largest — may also file for an overseas listing, it is learnt. IFCI had in recent years been paring its shareholding in NSE by selling small stakes. As on date, IFCI’s direct shareholding in NSE stood at about 3.05 per cent.
The last time IFCI sold shares in NSE, it realised a unit value of ₹3,950 per share of ₹10 each.
In June, State Bank of India had sold a 5 per cent stake in NSE at ₹4,050 per share for a total consideration of ₹911 crore. Mauritius-based foreign portfolio investor Veracity Investments had purchased the stake. Mukherjee on Saturday expressed confidence that following listing, NSE shares would be quoted higher than the prices transacted in the recent past. “I am sure that we will be able to realise more than the ₹3,950 per share that we got in the recent sale transaction,” he said.
SHCIL stake At least 10 bidders had evinced interest in a 26 per cent stake that IFCI had earlier put on the block. IFCI had in 2014 acquired IDBI Bank’s 18.95 per cent stake in SHCIL at ₹851 per share to take its total holding to 52.86 per cent. In the first week of January IFCI given its nod for a 26 per cent stake sale in SHCIL.
A debt-free company, SHCIL is also looking to launch an initial public offering (IPO) next year.
The SHCIL Board had in 2015 given an in-principle nod for the IPO.
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