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NSE may get Sebi relief on 37% stake sale in CAMS

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Mumbai: The National Stock Exchange (NSE) could get some relief from the capital market regulator on the decision to sell its stake in Computer Age Management Systems (CAMS) within a year, said two people with the direct knowledge of the development. The Securities and Exchange Board of India (Sebi) is said to have asked NSE to submit a proposal detailing the roadmap for the sale of its 37 per cent stake in CAMS after the exchange sought more time to comply with the order. The regulator has agreed to soften its stance because the mutual fund transfer agency’s upcoming initial public offering (IPO).

Sebi will take a final call in the matter after the exchange submits the roadmap, people cited above said. “Sebi will consider giving relaxation after analysing the roadmap submitted by NSE,” said a senior Sebi official.

“However, any such relief would be applicable only if the company lists before the divestment deadline.” The development comes as the investors of CAMS were concerned that Sebi’s diktat will adversely impact the IPO plans of CAMS.

If the share registrar floats its IPO, NSE’ shares will be subjected to one-year lock-in requirement as per Sebi rules.

This would make it difficult for NSE to divest its stake in time. Emails sent to Sebi and NSE remained unanswered. NSE currently owns a little over 37 per cent stake in CAMS through one of its subsidiaries, NSE Investments Limited (NSEIL). The development could impact the upcoming IPO plans of CAMS which filed the draft prospectus with Sebi last month, people cited above said. ET had reported on February 12 that in a letter dated February 4, Sebi observed that NSE failed to obtain prior regulatory approval while buying a stake in CAMS during FY13-14 and the investment was in violation of the rules for market intermediary institutions. CAMS is the largest share registrar and transfer agent in the Indian markets with a market share of more than 60 per cent in several segments.

The company is promoted by global private equity fund Warburg Pincus and has several marquee institutions, including HDFC Bank and Faering Capital, as shareholders. As per the offer document, existing shareholders are planning to sell 1.2 crore shares of CAMS through the offering, of which around 60 lakh shares would come from NSE while Warburg Pincus will offload up to 40 lakh shares. The rest of the shares would be offloaded by other investors.

To comply with the Sebi order, NSE will have to sell the entire 1.8 crore shares it currently owns.




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