The National Stock Exchange has been increasing, not just in terms of financials but also net worth. India’s private equity ChrysCapital raised new funds worth $700 Million and rebought their purchased themselves out to maintain their stake in NSE.
This “continuation fund” allows ChrysCapital to maintain its stake in NSE, where it first invested in 2016. This fund originally belonged to the ChrysCapital Fund VI. Since the life of this fund is ending, new investors have invested through ChrysCapital.HarbourVest Partners, LGT Capital Partners, and Pantheon Ventures were the main investors.
What Is Continuation Fund And How Does It Help Investors?
A continuation fund is a solution to overcome the limitations imposed on private equity. As a customary practice, any traditional private equity model has a maximum investment period of the 10-year term. Funds were expected to get liquidated once the term ends.
- The continuation fund helps avoid liquidating an asset that has not yet realized its full potential. Instead, the same fund sponsor (here ChrysCapital) sells this asset to new investors.
- This transaction helped old investors a chance to book their gains on the investment and allowed the continuation fund investors to invest in the exchange.
- The Fund VI investors were also offered a rollover in their equity as an alternative form of consideration.
Thus, Fund VI will continue as a significant, long-term shareholder in the NSE.
The $700 Million Transaction Sets New Records
The increasing investor interest in NSE made this an oversubscribed transaction, one of its kind in India and one of the largest in Asia-Pacific.
HarbourVest Partners and LGT Capital Partners headed the structuring of this continuation fund. They were given exclusive financial advice by UBS Private Funds Group. Cooley LLP advised ChrysCapital and Kirkland & Ellis LLP acted for HarbourVest Partners and LGT Capital Partners.
Why Such Continued Interest In NSE?
NSE has been touching some new records in the last 2-3 years, making them a favorite in investor’s eyes.Some notable achievements include:
- In 2023, NSE emerged as the largest derivative stock exchange in the world by the number of contracts traded.
- Third number global ranking in equity segments, in terms of trade numbers((electronic order book).
- The market cap of listed companies crossed USD 4 trillion in 2023 with the Nifty 50 index crossing the 20,000 mark for the first time.
- SME-listed companies surpassed 1,00,000 crore in market cap in 2023.
- NSE crossed 9 crore unique investors mark as of 29 Feb,2024.
NSE has crossed all its benchmarks in the years 2023 & 24. This made investors and fund managers around the globe keep their investments as growth doesn’t stop sooner.
NSE’s IPO Around The Corner
The NSE IPO is the most awaited IPO among all the unlisted shares in India. Due to regulatory issues with SEBI, the IPO is taking longer than usual. Considering the massive growth in its operations and financials, the investors hold a highly positive sentiment in the NSE share.
Currently, NSE has filed a Draft Red Herring Prospectus (DHRP) which is under process. This IPO is expected to be launched in 2024.
All these factors have led NSE Share price to a 33% Yearly growth in the last year from Rs 3600 per share on April 23 to Rs 4800 on April 24. NSE dominates the market share with more than 90% market share in all categories.
This is the best time to invest in NSE and gain from the growth in NSE Share price
How to buy NSE Shares?
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