India’s Biggest Bourse Explores Listing Shares on Rival Exchange

The National Stock Exchange of India Ltd., the country’s biggest bourse, plans to seek board approval for an initial share sale, Chairman Sunil Behari Mathur said.

“The board has to take some conscious calls about the right timing of the share sale,” Mathur said in a telephone interview on Friday. A decision will be taken once the nation’s securities regulator issues revised guidelines for new applications for exchange listings.

The bourse, which counts Goldman Sachs Group Inc. among its investors, is facing pressure from some of its shareholders to list as they look for an exit from one of the most regulated businesses in the South Asian country. Competition has also intensified after a third Indian bourse started operations in February 2013.

The NSE, as it is locally known, handles twice the volume of its 140-year-old competitor BSE Ltd. in the cash segment and controls 80 percent of India’s $28 billion a day stock-derivatives market. In 2012, the BSE proposed an IPO after starting an incentive program to lure derivatives traders in

2011.

Under local rules, the shares of NSE, when ready for trading, need to be listed on another exchange to avoid conflicts of interest. For the same reason, the NSE will also need to cast off its regulatory function.

Life Insurance Corp. of India and State Bank of India, both of which are controlled by the government, hold 10 percent each in NSE, according to data provided by the exchange. Goldman Sachs Strategic Investments Ltd. owns 5 percent.

Multi Commodity Exchange of India Ltd., which owns warrants in Metropolitan Stock Exchange of India Ltd., in March 2012 became the first Indian bourse to sell shares. The sale was oversubscribed 54 times as investors bet the exchange would gain from expanding trade in bullion, metals, crude oil and agriculture contracts.

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