SEBI has directed NSE to sell its entire stakes in CAMS- 12.02.2020

As per the news published in ET, the market regulator has asked the National Stock Exchange (NSE) to divest its complete stake in its associate company Computer Age Management Systems (CAMS). It implies that NSE will have to sell the entire 1.8 crore shares it currently owns in CAMS. Currently, the CAMS is valued around Rs 6,000 crore implying that NSE’s stake could be valued around Rs 2,000-2,200 crore. Moreover, the CAMS is also looking for IPO wherein existing investors are looking to sell their stakes. So creating this much demand IPO and NSE stake sale may have an impact on the price of CAMS share.

CAMS is the largest share registrar and transfer agent in the Indian markets with a market share of more than 60 percent 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.

Securities and Exchange Board of India has observed that NSE failed to obtain prior regulatory approval while buying a stake in CAMS during FY13-14 and hence the investment is in violation of the rules for market intermediary institutions (MIIs).

    First, it was a colocation case in which NSE was found guilty and now this stake sale in CAMS. The controversy for NSE does not seem to be over. The NSE is looking for an IPO this year, however, if these kinds of things prop up then chances of IPO may get delayed.