The National Stock Exchange (NSE) has taken a major step towards its anticipated public listing by submitting its Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI). The initial public offering (IPO) worth Rs. 30,000 crore is likely to be the biggest public issue in India ever, valuing the company at Rs. 5 lakh crore.
According to the DRHP, the IPO will be conducted entirely through Offer for Sale (OFS), with 14.59 crore shares sold by the existing shareholders representing around 6% of NSE's equity.
The OFS would comprise the largest sale in terms of shareholding volume by State Bank of India (SBI) among all the shareholders who participate in the OFS.
According to the DRHP, SBI plans to offload a total of 2.48 crore NSE shares. The bank had purchased these shares at a weighted average of Rs. 0.80 per share, making it one of its most successful long-term investments.
Based on the market expectations of an IPO price of around Rs. 2,000 per share, SBI's stake sale could be valued at nearly Rs. 4,950 crore. SBI presently holds a 3.23% stake in NSE and its subsidiary SBI Capital Markets holds an additional 4.33% stake.
Other investors, both domestic and international, are also on board the OFS. Bank of Baroda will auction approximately 1.10 crore shares, which were acquired at an average price of Rs. 0.54.
NSE's 4.44% stakeholder, Stock Holding Corporation of India, plans to divest 1.09 crore shares bought at Rs. 0.46 each.
International investors are cashing in on their investments as well. MS Strategic (Mauritius) Limited will sell 1.60 crore shares, which were bought at Rs. 66.54 apiece, while the Canada Pension Plan Investment Board will dispose of 1.19 crore shares bought at an average price of Rs. 324.13. Aranda Investments (Mauritius) Pte Ltd will also offload 1.12 crore shares.
Among the insurance firms, the New India Assurance Company and General Insurance Corp. of India will be selling 1.05 crore and 1.07 crore shares, respectively. National Insurance Company and United India Insurance Company will dispose of 6 lakh each.
Also Read: NSE IPO: LIC, SBI Among 20 Investors Ready to Sell Stake
Life Insurance Corporation of India (LIC) will not be a part of the OFS, unlike some institutional investors.
According to the DRHP, LIC remains the largest stockholder of the NSE with a 10.72% stake and has decided to keep all the NSE shares, indicating confidence in the future outlook of NSE.
The NSE IPO, which has around 1.8 lakh shareholders and a valuation of over Rs. 5 lakh crore, is likely to be one of the most-watched IPOs in Indian capital markets. The exchange has also engaged 20 merchant bankers, legal counsellors and other intermediaries to handle the proposed public issue.