Bahrain’s Investcorp to acquire NSE’s digital tech arm

Bahrain’s alternative asset manager Investcorp announced on Monday that it has entered an agreement to acquire the National Stock Exchange’s (NSE) digital technology business arm NSEIT. The acquisition deal is valued at  ₹1,000 crore, touted to be one of the largest mid-market deals in the country.

Founded in 1999, NSEIT offers advanced digital transformation and cybersecurity services to customers in capital markets, insurance, and banking. Some of the key offerings include digital engineering, data and analytics, artificial intelligence, and cloud services. It serves over 300 customers and has acquired Aujas Cybersecurity and cloudxchange.io in the last five years. NSEIT mainly operates in India, North America, and the Middle East; with the acquisition, the firm hopes to make significant expansion in the US where it has grown at over 50% CAGR in the last four years by building its client roster in financial services. 

“This transaction is a continuation of NSE’s strategy to focus on its core business areas and we are pleased that Investcorp, which is a leading global investor with deep experience in IT services, is assuming responsibility of NSEIT,” said Ashishkumar Chauhan, MD and CEO of NSE.

To be sure, the sale of NSEIT comes after the Mahalingam Committee appointed by the Securities and Exchange Board of India (SEBI) issued a report outlining suggestions for strengthening governance at market infrastructure institutions in 2022. In 2023, NSE said that it has plans to divest non-core businesses including technology and education. With the sale to Investcorp, the enterprise value for the digital technology is anticipated to be in the ₹425 crore to ₹475 crore.

NSEIT’s business has two main components – digital examination business and digital technology business. As per NSE’s release in March, the current sale to Investcorp is exclusively for the digital technology business.