SEBI clears NSDL IPO; IDBI Bank, SBI to sell stakes in OFS

MUMBAI — The Securities Exchange Board of India (SEBI) has cleared the initial public offering (IPO) of India’s largest depository, the National Securities Depository Ltd (NSDL).

The market watchdog issued an observation on Sept 30, for the company’s public offering. In SEBI’s parlance, obtaining the observation letter means its go-ahead to float the public issue.

The issue of the Mumbai-based securities depository will consist only of an offer for sale component.

According to a draft red herring prospectus (DRHP) filed by NSDL on July 7, 2023, the depository will sell up to 5.72 crore shares through the issue of equity shares with a face value of INR 2.

The IDBI Bank which holds a nearly 26 per cent stake in NDSL, will sell up to 2.22 crore shares, while the NSE which has a 24 per cent stake in the depository firm, will sell up to 1.8 crore shares in the IPO.

The State Bank of India (SBI), the Union Bank of India (UBI), and the Canara Bank hold 5 per cent, 2.8 per cent and 2.3 per cent stakes in the company, respectively. The UBI will sell 56.2 lakh shares, and the SBI, and the Administrator of the Specified Undertaking of the Unit Trust of India (SUUTI) will sell 40 lakh and 34 lakh shares in the OFS, respectively.

The HDFC Bank holds an 8.95 per cent stake in the NSDL and the private lender will sell a 2 per cent stake in the company.

The National Securities Depository Ltd. is the largest depository in India, as of March 31, 2023, measured by the number of issuers, active instruments, market share in demat settlement volume, and the value of assets held under custody. In November 1996, NSDL became the pioneer of securities dematerialisation in India following the implementation of the Depositories Act.