This Mid Cap IT Stock May Be Lining Up To Buy NSE's Tech Arm, Shares Firm

IT firm Persistent Systems is reportedly in discussions to acquire a controlling stake in NSEIT, the wholly-owned IT services arm of the National Stock Exchange (NSE).

What Happened: The potential sale of NSEIT by the NSE aligns with the recommendations of a committee appointed by the Securities and Exchange Board of India (SEBI) to enhance governance at stock exchanges and other market infrastructure institutions, Moneycontrol reported, citing sources.

The committee, led by former Securities and Exchange Board of India (SEBI) member G Mahalingam, suggested that stock exchanges exit non-core businesses. The NSE management, in response to the committee’s recommendations, reportedly initiated the process to streamline management focus away from non-core businesses earlier this year.

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Why It Matters: NSEIT, established in 1999, specialises in providing digital examination and edtech solutions, cybersecurity, RPA, testing, cloud services and large infrastructure management services. Its clientele primarily includes businesses in the banking, insurance and capital market sectors. In the fiscal year 2021, NSEIT reported revenue of ₹272.4 crore, according to regulatory filings.

As part of this effort, NSE managing director and CEO Ashish Chauhan stated in May that the education and technology businesses of the NSE Group had been classified as discontinuing operations and assets held for sale.

Persistent Systems, headquartered in Pune and established in 1990, has become a prominent player in the midcap IT sector. The company has a history of acquisitions both in India and abroad. In 2022, it acquired the US-based MediaAgility for around $72 million (₹600 crore).

Price Action: Persistent System’s share price was up 0.66% at ₹6,350.65 around noon on Friday.

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