NSE IPO: State-Run Shareholders Led by SBI Could Make Over ₹12,800 Crore Profit From Share Sale
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Ten public-sector entities holding stakes in NSE, led by SBI and The New India Assurance Company, stand to collectively pocket close to Rs 12,802 crore in profit from the exchange's Rs 22,561.57 crore IPO, according to the Red Herring Prospectus, with the offer for sale opening September 17 and listing set for September 24.
The National Stock Exchange’s much-awaited initial public offering is set to create a sizeable windfall for its state-run shareholders, with 10 public-sector entities together potentially making more than ₹12,800 crore from their stake sales if the shares are sold at the upper end of the IPO price band.
The NSE IPO will open for subscription on September 17 and close on September 21, with the price band fixed at ₹1,700-₹1,785 per share. The issue is entirely an offer for sale, meaning NSE itself will not receive any money from the share sale. The proceeds will go to the existing shareholders selling their stakes.
Among the state-run shareholders, State Bank of India is set to make the biggest gain. SBI is offering up to 1.60 crore NSE shares in the IPO. At the upper price of ₹1,785, the stake sale could fetch around ₹2,850 crore, while the bank’s acquisition cost for these shares was only about ₹1.28 crore. That leaves a potential profit of roughly ₹2,849 crore before taxes and other costs.
New India Assurance is another major beneficiary. The insurer is selling 1.05 crore NSE shares, which could generate about ₹1,874 crore at the upper price band. Its estimated acquisition cost was around ₹33.6 lakh, implying a potential gain of nearly ₹1,874 crore.
SBI Capital Markets, which has been added as a selling shareholder in the red herring prospectus, is offering about 87.8 lakh shares. At ₹1,785 a share, the stake could be worth around ₹1,567 crore. Bank of Baroda is offering around 76.9 lakh shares, translating into proceeds of about ₹1,373 crore at the upper band.
Other state-run shareholders in the offer include Stock Holding Corporation of India, General Insurance Corporation of India, United India Insurance, Oriental Insurance, National Insurance and Indian Bank. Taken together, the 10 PSUs could generate around ₹12,811 crore from the sale, with the estimated profit working out to more than ₹12,800 crore because many of these shares were acquired at extremely low historical prices.
The scale of the gains reflects how dramatically the value of NSE has risen since these institutions acquired their holdings. At ₹1,785 per share, the IPO values the exchange at about ₹4.42 lakh crore. NSE is offering 12.64 crore shares through the OFS, after reducing the proposed issue size by more than 15% from the earlier plan.
The SBI-led group of state-run shareholders is therefore entering the IPO with a very different equation from a conventional public-market seller: the proceeds represent the monetisation of stakes accumulated years ago at a fraction of the IPO price. The NSE IPO is scheduled to list around September 24, with anchor investor bidding taking place on September 16.
Also Read - NSE IPO Anchor Demand Stronger Than Expected Ahead of ₹22,562 Crore Issue: Ashish Chauhan
This article is for informational purposes only and should not be considered investment advice from Kotak Neo. For compliance T&C and disclaimers, Visit www.kotakneo.com/disclaimer
Rochelle Britto has spent 8+ years decoding India's markets, businesses, and consumer economy, reporting for ET Prime and Times Internet along the way, covering the stories behind the numbers.
A Mumbai native and perpetual planner of the next holiday, she stays far, far away from the eternal question, “Where are we going next?” When she's not chasing headlines, she's chasing new cultures, open roads, and a bit of quiet in nature.
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