SBI Capital Markets Adds Stake to NSE IPO as Massive Rs 30,000 Crore Offer For Sale Closes In

SBI Capital Markets Adds Stake to NSE IPO as Massive Rs 30,000 Crore Offer For Sale Closes In​

The National Stock Exchange of India (NSE) is gearing up for one of the largest public offerings in recent memory. The exchange's proposed Initial Public Offering (IPO), estimated at around Rs 30,000 crore, has confirmed several key selling shareholders, including SBI Capital Markets Ltd (SBICAPS).

The IPO is being structured as an Offer For Sale (OFS). This means that the shares are being sold by existing corporate stakeholders. The proceeds from this large issue will therefore accrue directly to these selling entities rather than representing fresh capital raised by NSE.

SBICAPS' Role in the Monumental NSE Offering​

SBICAPS has been added as a major selling shareholder in the upcoming NSE IPO, joining the ranks of several other institutional investors. The firm is slated to sell up to 8.78 million NSE shares as part of the offering. This development was disclosed through an addendum to NSE's draft red herring prospectus (DRHP).

This news updates previously issued information regarding the shareholding structure. Initially, State Bank of India (SBI) alone held the stake being sold up to 24.75 million shares. Now, this total is split between two SBI group entities.

Deciphering the Share Holding Structure​

The overall issue size for the NSE IPO will remain unchanged despite the changes in selling shareholders. SBI itself will be offering a significant portion of the stock, specifically up to 15.97 million NSE shares. This clarifies and segments the stake being offered by the broader SBI group entities.

SBICAPS' participation as a seller is in addition to its role as one of the book-running lead managers for the IPO. The company acquired its NSE shares through transfers from various entities between 2007 and 2008, including MS Strategic (Mauritius) Ltd and Reliance Strategic Investment Ltd.

Financial Metrics and Stakeholder Details​

The weighted average acquisition price of the shares being offered by SBICAPS has been disclosed at Rs 0.38 per share. This figure is notably lower than the acquisition cost for the shares offered by SBI, which stands at Rs 0.80 per share.

Beyond SBICAPS and SBI, a number of other corporate shareholders are set to sell their stakes in this massive public issue. These stakeholders include Bank of Baroda, The New India Assurance Company, General Insurance Corporation of India, Canada Pension Plan Investment Board, and United India Insurance Company among others.

Significance for the Market​

The estimated magnitude of the NSE IPO at around Rs 30,000 crore positions it as one of the largest public issues currently anticipated in the market. The diversification of selling shareholders reinforces institutional interest in the exchange's stock base.

This OFS structure allows existing corporate holders to monetize a significant portion of their holdings through the IPO process. All these stakeholders are involved in offering up to 8.78 million shares (from SBICAPS) and up to 15.97 million shares (from SBI), totaling a large tranche of NSE stock.