Upcoming IPO: SEBI approves NSDL IPO; HDFC Bank, SBI, Union Bank, others to divest stake in depository

National Securities Depository Ltd (NSDL), India's largest depository, has been issued final observation by the Securities and Exchange Board of India (SEBI) to launch an initial public offering (IPO).

NSDL IPO will include the offer for sale (OFS) of 57,260,001 shares and will lead to IDBI Bank, NSE, SBI, HDFC Bank, and Union Bank of India paring their stakes.

NSDL submitted its Draft Red Herring Prospectus (DRHP) to the SEBI on July 7, 2023. Nonetheless, in August 2023, the IPO was kept in abeyance by SEBI, however it was lifted. If there is an ongoing investigation or if the company or other regulatory bodies delay providing requested information, the regulator has the authority to halt any IPO.

The depository stated in the Draft Red Herring Prospectus (DRHP) that six different shareholders will sell a total of 57.3 million shares in the initial public offering (IPO). IDBI Bank aims to sell up to 22.2 million shares, while NSE plans to sell 18 million shares.

Union Bank of India is looking to sell 5.62 million shares, and both State Bank of India and the Administrator of the Specified Undertaking of the Unit Trust of India (SUUTI) intend to sell 4 million and 3.4 million shares, respectively. The sixth shareholder participating in the IPO, HDFC Bank, aims to sell 4 million shares.

NSDL is an market infrastructure institution (MII) registered with SEBI, providing a diverse array of products and services to India's financial and securities markets.

As a depository, NSDL offers a strong depository framework that allows market participants to engage in India's financial and securities markets. Additionally, they are integral in the development of products and services to meet the expanding requirements of India's financial services industry.

As of March 31, 2023, NSDL oversaw over 31.46 million active demat accounts through 283 authorized depository participants. The account holders were located in more than 99% of postal codes in India and 186 countries globally. By March 31, 2023, NSDL had 40,987 issuers registered with them as outlined in its DRHP.

The issue's book-running lead managers include ICICI Securities, Axis Capital, HSBC Securities and Capital Markets (India), IDBI Capital Markets and Securities Ltd, Motilal Oswal Investment Advisors Ltd, and SBI Capital Markets Ltd.

Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decision.