NSE IPO: SBI Capital Markets Emerges As New Seller In Updated Filing

The National Stock Exchange (NSE) has submitted an updated draft red herring prospectus (DRHP) to the Securities and Exchange Board of India (SEBI), two months after the original filing was made in June, with a closer comparison of the two documents throwing up three notable changes.

In the original prospectus, State Bank of India (SBI) alone was listed to sell up to 2.475 crore shares in the offering at a disclosed acquisition cost of 80 paise per share.

The updated filing splits this same block between two entities, with SBI now selling 1.59 crore shares and its subsidiary, SBI Capital Markets, selling a further 87.8 lakh shares.

Together, the two figures add up to the same 2.475 crore shares as before, meaning the overall initial public offering (IPO) size of 14.89 crore shares, among the largest offer for sale (OFS) issues in Indian market history, remains unchanged.

According to the filing, what has shifted is the composition of selling shareholders within the SBI group rather than the scale of the offer itself.

SBI Capital Markets Holds A Larger Stake Than Its Parent

The shareholding table in the prospectus shows that SBI Capital Markets holds 10.73 crore shares in NSE, translating to a 4.33% stake that makes it the exchange's fourth-largest shareholder, ahead of Aranda Investments and Stock Holding Corporation of India. Notably, this places SBI Capital Markets ahead of its own parent, SBI, which holds 7.98 crore shares, or a 3.23% stake, and ranks sixth on the list.

Despite holding the larger of the two stakes, SBI Capital Markets did not appear among the selling shareholders in the original June filing. It entered the offer for sale for the first time with this update, with its acquisition cost of 38 paise per share also being disclosed for the first time, since it had earlier featured only as one of the IPO's book-running lead managers rather than as a seller.

Three-Year Cost Of Acquisition Revised Downward

The prospectus also discloses the weighted average cost at which selling shareholders acquired their NSE shares across different lookback periods. While the one-year and 18-month figures, at ₹1,909.02 and ₹1,747.54, respectively, remain unchanged from the original filing, the three-year figure has been revised from ₹229.23 to ₹205.86, a reduction of nearly 10%. This shift is likely linked to SBI Capital Markets' shareholding being included in the pool of selling shareholders for the first time.

Following the filing, investors and the public now have 21 days to send their comments to SEBI. The feedback could affect when NSE finalises its red herring prospectus and moves ahead with its IPO plans.

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