Tag Archives: IPO

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

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The Securities and Exchange Board of India (SEBI) has given its nod for the initial public offering (IPO) of the National Securities Depository Ltd (NSDL), India’s largest depository. This approval marks a significant milestone for the country’s financial market infrastructure.

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.

Swiggy Increases IPO Size to $1.4 Billion, Plans to Expand ‘Instamart’

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In a significant development in India’s burgeoning IPO market, SoftBank-backed food delivery giant, Swiggy, has received approval from its shareholders to increase the size of its fresh issue in its upcoming IPO. The approval will allow the company to raise the fresh issue size to 50 billion rupees ($595 million), a substantial increase from the previously planned 37.5 billion rupees. This information was disclosed by individuals privy to the matter on Thursday, 10th March 2024.

The Indian IPO market has been on a tear, with approximately 250 companies raising over $9 billion so far this year. This figure is more than double the amount raised during the same period last year, according to data from the London Stock Exchange Group (LSEG). The increase in Swiggy’s fresh issue size will further boost this trend, contributing to the market’s robust growth.

Swiggy’s existing shareholders will sell shares worth 66.64 billion rupees, a figure that remains unchanged despite the increase in the fresh issue size.

Swiggy’s IPO: A New Benchmark

The increase in the fresh issue size will push the total size of Swiggy’s initial public offering to $1.4 billion, up from the previously planned $1.25 billion. This makes Swiggy’s IPO one of the largest in the country this year, surpassing NTPC Green Energy’s $1.2 billion public offering filing.

Swiggy, headquartered in Bengaluru, had filed its draft papers for the IPO last week. The company is reportedly targeting a valuation of $15 billion, a testament to its rapid growth and dominant position in India’s food delivery market. However, Swiggy did not immediately respond to a request for comment on these developments.

The company’s investment plans following the IPO are ambitious and forward-looking. A key focus area is the expansion of its quick-commerce business, ‘Instamart’.

Instamart: The Future of Quick Commerce

This service aims to deliver everything from groceries to higher-margin electronics in just 10 minutes, a feat that would revolutionize the e-commerce landscape. Swiggy’s rivals, including Zomato and Zepto, are also racing to establish their presence in this promising segment.

The shareholder approval for the upsized IPO marks a significant milestone for Swiggy. The main shareholder in the company, SoftBank, has been instrumental in supporting Swiggy’s growth and will likely play a crucial role in the IPO process. The upsized IPO, approved on Thursday, 10th March 2024, will provide Swiggy with additional resources to execute its ambitious growth plans.

Historically, the upsizing of IPOs has been a strategy employed by companies expecting strong investor demand. For instance, in 2020, Snowflake Inc., a cloud-based data warehousing startup, upsized its IPO due to overwhelming investor interest, raising $3.4 billion and marking the largest software IPO in history.

Similarly, Swiggy’s decision to upsize its IPO could be indicative of strong investor confidence in the company’s growth prospects and the overall potential of India’s digital economy.

Hyundai India Gears Up to Launch Megasize $3 billion IPO, Largest After LIC’s 2 Years Ago

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Hyundai Motor India, the country’s second-largest car manufacturer, is reportedly planning to launch a $3 billion Initial Public Offering (IPO) on October 14, 2024. This IPO, if it goes ahead, would be the largest in India after the Life Insurance Corporation’s (LIC) IPO, which was around Rs 21,000 crore. The IPO of Hyundai Motor India Limited will be an offer for sale (OFS), with the company planning to sell 14.2 crore shares, which is around 17.5 per cent of the total shareholding.

The IPO has been approved by the Securities Exchange Board of India (SEBI), the country’s market regulator. However, no official statement has been given by Hyundai regarding the IPO dates. The company’s decision to go public is subject to market conditions, particularly the ongoing conflict between Iran and Israel in the Middle East.

Market Conditions and Geopolitical Tensions

The Indian stock market recently experienced a sharp fall due to Iran’s missile attack on Israel, with both the frontline indices Sensex and Nifty closing down by more than 2 per cent. This was the biggest fall in the stock market in the last two months. The launch of Hyundai Motor India’s IPO could be impacted by unexpected changes in the market due to geopolitical tensions. If the situation escalates, it could affect market stability, which might influence the IPO’s launch date or its success.

Hyundai India is a significant player in the Indian automobile market, holding a market share of around 15 per cent. It is the second-largest car company in the country after Maruti Suzuki. The company has been consistently selling around 60,000 units per month, except for the last few months due to industry-wide slowdown. Nearly one in four Hyundai cars is sold in India now.

Hyundai’s Market Position and Future Prospects

After the listing, Hyundai India’s market cap could be almost half the valuation of its Seoul-listed promoter company Hyundai Motors at $47 billion. The IPO comes at a time when the Indian stock market is witnessing a flurry of public issues. Companies like Swiggy, NTPC Green Energy, and Canara Robeco Asset Management Company are also planning to go public soon.

The surge of retail investors, the resilience of India’s economic growth, and rising optimism about the potential start of a rate-cutting cycle have driven the market on an upward trajectory. However, concerns persist about stretched valuations amid unimpressive quarterly earnings of Indian companies.

AI Race: Cerebras Systems Emerges Stronger As Potential Rival to Nvidia, But Who’s G42?

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Cerebras Systems, a rising player in the AI hardware space, is looking to challenge Nvidia’s dominance as it gears up for a major IPO. Nvidia, whose chips are crucial for training AI models like OpenAI’s ChatGPT, has seen its market value soar nearly 600% since ChatGPT’s rise. However, Cerebras, backed by investors like Altimeter and Benchmark, aims to capitalize on the AI boom with its own advanced processors.

Cerebras specializes in producing large arrays of processing cores with super-fast memory. Its revenues hit $136 million in the first half of 2024, nearly double what it made in 2023. While the company is still unprofitable, it has managed to reduce its operating losses significantly. It now seeks to raise $1 billion in its IPO, potentially valuing the company between $7 billion and $8 billion.

However, there’s a catch—97% of Cerebras’ sales this year come from a single customer, G42, an AI developer based in Abu Dhabi. G42 is not only its top buyer but also a major investor, making the relationship complicated. G42 has committed to spending $1.4 billion on Cerebras technology, a deal that guarantees growth but raises concerns about the company’s dependency.

Cerebras is trying to expand, having recently signed a deal with Saudi Aramco. However, risks remain, especially with U.S. national security regulators who could block exports due to concerns over sensitive AI technology.

While Cerebras has made strides, its research spending—$155 million annually—is a fraction of Nvidia’s $3 billion per quarter. Investors may be drawn to Cerebras as a potential Nvidia rival, but the company’s reliance on a single customer and its slower pace of innovation could pose challenges in the highly competitive AI chip market.