NSDL Files Draft Papers With SEBI for IPO

National Securities Depository Limited (NSDL)

The National Securities Depository Limited (NSDL), a registered Market Infrastructure Institution (MII) regulated by the Securities and Exchange Board of India (SEBI), has submitted draft papers to SEBI for its Initial Public Offering (IPO). NSDL operates as a crucial player in the financial and securities markets of India, providing a range of products and services.

The news of NSDL’s IPO preparations was initially reported by Moneycontrol on December 5, 2022. As part of its IPO, NSDL plans to offer a full-fledged offer-for-sale (OFS) where existing stakeholders, such as IDBI Bank and the National Stock Exchange (NSE), may sell their respective stakes.

If the IPO listing plan proceeds successfully, NSDL will become the second depository service company to be listed on the stock market. The first depository service company to be listed was Central Depository Services Limited (CDSL) in 2017. CDSL’s IPO garnered significant attention and received an overwhelming response from investors. It was subscribed nearly 170 times and successfully raised Rs 524 crore.

The decision to bring NSDL’s IPO indicates the company’s confidence in the market and its desire to provide stakeholders, including IDBI Bank and NSE, an opportunity to divest their stakes.

The IPO will also enable NSDL to raise capital and potentially attract new investors, facilitating its growth and expansion plans.

As NSDL moves forward with its IPO process, it will need to comply with regulatory requirements, finalize its prospectus, and obtain necessary approvals.

The IPO will likely generate substantial interest from investors, given NSDL’s significant role in the securities market infrastructure of India.

Overall, NSDL’s IPO represents a significant milestone for the company and the securities market in India. It showcases the growing demand for depository services and highlights the importance of robust market infrastructure in facilitating efficient and secure trading and investment activities.

After the Depositories Act was enacted in 1996, NSDL played a pioneering role in introducing the concept of dematerialization of securities in India.

It successfully implemented dematerialization in November 1996, enabling investors to hold securities in electronic form. Since then, NSDL has emerged as the largest depository in India, consolidating its position as of March 31.

The upcoming IPO of NSDL will be structured as a full-fledged Offer-for-Sale (OFS), wherein a total of 57,260,001 equity shares will be offered for sale on behalf of the existing shareholders of NSDL. IDBI Bank Ltd. plans to sell 22,220,000 equity shares through the OFS, while the National Stock Exchange of India Ltd. will sell up to 18,000,001 shares.

Union Bank of India intends to sell up to 5,625,000 equity shares, while State Bank of India Ltd. will offer 4,000,000 equity shares for sale. Additionally, HDFC Bank Limited (SS) will put up 3,415,000 equity shares for sale on behalf of Unit Trust of India.

By offering shares through the OFS, the existing shareholders of NSDL will have an opportunity to divest their stakes and monetize their investments.

This structure allows for a transparent and efficient sale of shares to the public, with the proceeds going directly to the selling shareholders rather than being raised by the company itself.

The participation of reputable financial institutions like IDBI Bank, the National Stock Exchange of India, Union Bank of India, State Bank of India, HDFC Bank Limited (SS), and Unit Trust of India in the OFS highlights the significant interest and support from the industry.

The offering of a substantial number of shares underscores the size and significance of NSDL’s IPO, indicating the market’s confidence in the company’s prospects and the potential for strong investor demand.

As NSDL prepares for its IPO, it will undertake the necessary steps, including obtaining regulatory approvals, finalizing the offer document, and determining the IPO price and timeline.

The successful completion of the IPO will mark another milestone in NSDL’s journey as a key player in the Indian securities market and further enhance its position as the largest depository in the country.

ICICI Securities Limited, Axis Capital Limited, HSBC Securities & Capital Markets (India) Private Limited, IDBI Capital Markets & Securities Limited, Motilal Oswal Investment Advisors Limited, and SBI Capital Markets Limited have been appointed as the Book Running Lead Managers (BRLMs) to the NSDL IPO.

As BRLMs, these firms play a crucial role in managing the IPO process and ensuring its smooth execution. They assist in various aspects of the IPO, including the drafting of the offer document, conducting due diligence, coordinating with regulatory authorities, marketing the IPO to potential investors, and managing the allocation and pricing of shares.

ICICI Securities Limited, a leading financial services company, brings its extensive expertise in capital markets and wealth management to the table.

With a strong track record in managing IPOs, ICICI Securities offers comprehensive services in investment banking, institutional broking, and retail broking.

Axis Capital Limited, the investment banking arm of Axis Bank, is known for its proficiency in providing financial advisory and capital market solutions. It has a wide network and capabilities in structuring, underwriting, and distributing equity and debt offerings.

HSBC Securities & Capital Markets (India) Private Limited, a subsidiary of HSBC, is a prominent player in the investment banking domain.

With its global reach and expertise, HSBC Securities & Capital Markets brings a wealth of experience in managing capital market transactions and providing financial advisory services.

IDBI Capital Markets & Securities Limited, a subsidiary of IDBI Bank, has established itself as a key player in investment banking and securities services.

It offers a range of services, including underwriting, debt syndication, and corporate advisory, backed by its strong parentage and extensive network.

Motilal Oswal Investment Advisors Limited, a leading financial services firm, specializes in investment banking, asset management, and wealth management. It has a track record of successfully managing IPOs and providing strategic advice to clients.

SBI Capital Markets Limited, a subsidiary of State Bank of India, is a well-known investment bank with expertise in managing public offerings and other capital market transactions.

It offers a comprehensive suite of services, including equity capital markets, debt capital markets, and mergers and acquisitions advisory.

The combined experience and capabilities of these Book Running Lead Managers contribute to the efficient management and successful execution of the NSDL IPO.

Their involvement ensures that the IPO process adheres to regulatory requirements, attracts the right investors, and maximizes the value for NSDL and its stakeholders.