As SEBI Clears IPO Application of NSDL, both IDBI Bank, SBI Gear Up To Sell Stakes

SEBI issued an observation on September 30, indicating a green light for the IPO. In regulatory terms, the observation letter from SEBI signifies that the market regulator has reviewed and cleared the company’s proposal to float a public issue.

The NSDL IPO will be entirely an offer-for-sale (OFS), allowing its existing shareholders to offload their stakes. According to the draft red herring prospectus (DRHP) filed by the depository on July 7, the sale will involve up to 5.72 crore shares, each with a face value of Rs 2.

Among the key sellers, IDBI Bank, which holds nearly 26% of NSDL, plans to offload 2.22 crore shares, while the National Stock Exchange (NSE), with a 24% stake, will sell 1.8 crore shares. State Bank of India (SBI), Union Bank of India (UBI), and Canara Bank, holding smaller stakes, will also participate in the OFS. UBI will sell 56.2 lakh shares, while SBI and the Administrator of the Specified Undertaking of the Unit Trust of India (SUUTI) will sell 40 lakh and 34 lakh shares, respectively. HDFC Bank, which holds an 8.95% stake, is also set to divest a 2% stake.

NSDL has been a cornerstone of India’s financial infrastructure since its inception. Established in November 1996, following the implementation of the Depositories Act, NSDL spearheaded the dematerialisation of securities in India—a move that revolutionized the handling of financial instruments in the country. Prior to dematerialisation, the trading of physical certificates was cumbersome and fraught with risks such as forgery and loss. NSDL’s pioneering efforts addressed these concerns, enabling faster, safer, and more efficient securities trading.

Today, NSDL remains a leader in the depository space, managing the largest number of issuers and active instruments in the country. As of March 31, 2023, it dominates the market in terms of dematerialised settlement volume and the value of assets held in custody. Its upcoming IPO marks another chapter in the company’s influential role in India’s financial markets.

The IPO is expected to attract significant interest, given the firm’s pivotal position and the participation of major financial institutions in the offering.