Sep 17, 2010
According to shareholding details available in annual reports of the stock exchanges, the number of foreign shareholders in the NSE increased from eight in 2008-09 to 12 in 2009-10, while their combined stake improved from 26% to 32%. In the BSE, it rose from six to seven, resulting in a marginal rise in foreign shareholding from 25.7% to 27% during the period.
With the stock market on the upswing, foreign institutional investors and private equity funds have been eyeing stakes in the two stock exchanges, leading to a spurt in their valuations in the past one year, say brokers.
Already, both exchanges enjoy a fat net profit margin, which is rarely seen in other businesses. In financial year 2009-10, NSE reported a net profit of `613 crore and a gross revenue of Rs 1,266 crore, translating into a 48% margin. Its rival the Bombay Stock Exchange’s (BSE) net profit for that year stood at `213 crore on revenues of `485 crore, a 44% margin.
Foreign shareholding in the two stock exchanges would have changed after the recent deals. Foreign investors have generally been bullish on the Indian stock market and see tremendous potential for growth of the stock exchanges whose prospects are linked to the securities market, according to brokers. They feel that the booming stock market has boosted the prospects of NSE and BSE, which have a net worth of ‘2,400 crore and ‘1,900 crore, respectively.
