NEW DELHI: The revival is in full swing at India’s oldest stock exchange. Vernon & Park Capital, a US-based private equity company, and Cyprus-based Dunbay are likely to pick up the remaining 5% stake left for foreign investors in the Delhi Stock Exchange.
While Vernon is eyeing a 3% stake in the exchange, Dunbay is looking to raise its stake from 1% to 3%. In case of Vernon & Park Capital, if the deal happens, this would be the sixth major foreign investment in the DSE. At present, the foreign stake in the DSE is 21%.
A senior DSE official told SundayET that talks with Vernon & Park Capital were in the preliminary stages and a member broker would offer his 3% stake for the deal. “This would be the case with Dunbay too. The exchange would not issue any fresh equity, as a trading member would sell his stake. We will try to conclude the deals before we commence our operations in June,” he said.
When contacted, DSE executive director and CEO H S Sidhu confirmed that the discussions were on but refused to divulge details. A mail sent to Vernon & Park Capital elicited no response.
Vernon & Park Capital, which focuses on investments in exchanges and financial markets sector, is also engaged in discussions with the DSE for the ‘market maker’ position.
LFP Group, New Vernon Private Equity, Mauritius-based Wilmette Holdings, Cyprus-based Dunbay and Passport Global Master Fund SPC (British Virgin Islands) are the other foreign stake holders in the stock exchange.
DSE, which stopped trading in 2000, is planning to restart its operations in June this year, with a focus on smaller companies. At DSE, trading members hold 46% stake and 33% stake is with private investors such as Parsvnath Developers, Financial Technologies India (FTIL) and Omaxe.
The DSE right now has reserves worth Rs 104.82 crore, with a cash and bank balance of Rs 79.43 crore in its books of account. The exchange’s net profit for the financial year 2007-08 was Rs 2.41 crore.
Indian stock exchanges have seen a surge in foreign interest ever since the government allowed foreign stake up to 49% (including both FII and FDI).
Source:The Economic Times