George Soros, the US billionaire investor and, founder and chairman of the Open Society Institute and Soros foundations network, has acquired nearly 4% equity stake in the Bombay Stock Exchange (BSE) from Dubai Financial for approximately $35m.
Soros has acquired the stake in BSE through his Quantum hedge fund for an estimated INR380 ($8.14) per share. The transaction values BSE at a little more than $800m.
A host of foreign funds have been showing interest in India’s financial markets in the recent past. However, as per the regulations in India, a foreign institution cannot hold more than 5% stake in a stock exchange.
Deutsche Boerse and Singapore Exchange each hold 4.98% interest in BSE, which they acquired in March 2007, when the exchange was demutualised.
Recently, Temasek, an investment arm of Singapore government, had acquired 5% stake in BSE’s main rival the National Stock Exchange from the New York Stock Exchange (NYSE).
Temasek exited from BSE after NYSE entered into a cross-listing agreement with the Chicago Mercantile Exchange.
At present foreign investors hold a 30% stake in the Indian bourse, lower than the permissible 49% limit, as per Indian regulations.