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State Bank of India (SBI), the country's largest lender, will sell approximately 3.85 percent stake in National Stock Exchange (NSE), it informed the stock exchanges on August 28.
"Pursuant to the applicable provisions of the SEBl (LODR) Regulations, advise that the appropriate authority has accorded approval to explore and initiate the process of divestment up to 3.8958% of stake in SBI in National Stock Exchange of lndia Ltd. through Secondary Sale," SBI said in a filing on BSE.
As of June-end 2018, SBI owned 5.19 percent in NSE.
Other entities that hold stake in the bourse include Life Insurance Corporation of India (12.51 percent), IFCI (2.44 percent) and IDBI Bank (1.05 percent), among others.
As per market reports, NSE’s equity capitalisation is estimated at around Rs 45,000 crore. The sale would imply value unlocking of approximately Rs 1,700 crore for SBI's 3.8958 percent stake.
In July 2016, SBI had sold 5 percent stake in NSE to Mauritius-based foreign investor Veracity Investments for Rs 911 crore.
NSE was hoping to tap the capital market with an initial public offer (IPO) last year, but it had to defer the proposal after markets regulator the Securities Exchange Board of India (SEBI) initiated a probe into algorithmic trading manipulation at the exchange.
The offer was expected to provide an exit to many investors. With the IPO likely to get pushed well into the next fiscal, several investors have been looking to liquidate their holdings to investors before the offer finally hits the market.
In May this year, SBI chairman Rajnish Kumar had said that the bank will require Rs 20,000 crore as growth capital this fiscal will be funded by a combination of tier-1 bonds and sale of non-core assets.
Earlier this month, the state-owned bank announced divestment of up to 4 percent stake in SBI General lnsurance to a non-promoter through small parcel share sale to unlock about Rs 500 crore.
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