National Securities and Depository may target to complete the proposed initial public offering before October 2 to enable its principal shareholders, IDBI Bank, and National Stock Exchange to comply with the SEBI D&P Regulations.
The SEBI’s Depositories and Participants norms mandate that any shareholding in a company engaged in the depository business beyond the permissible limit of 15 per cent shall be reduced to the specified limit within five years after the regulations took effect in 2018.
IDBI Bank and NSE India currently hold 26.10 per cent and 24 per cent of the paid-up Equity Share capital of NSDL.
Any failure to comply with this requirement in the stipulated timeline may lead to adverse observations or directions from SEBI, which may impact our business and operations, said NSDL in its Draft Red Herring Prospectus.
In April, SEBI gave in-principal approval for one-year to list NSDL on the stock exchange, subject to compliance with the provisions of the SEBI D&P Regulations. SEBI approval for IPO expires on next April 13, it said.
Of the 5.22 crore shares held, IDBI Bank will sell 2.22 crore in the proposed IPO, while NSE will offload 1.80 crore shares of 4.80 crore held.
Similarly, HDFC Bank and SBI will offer 40 lakh shares each for sale from about 1.79 crore and one crore shares owned. Union Bank will offload an entire stake of 56.25 lakh shares while the Administrator of the Specified Undertaking of the Unit Trust of India will sell 34.15 lakh of about 1.37 crore equity shares held.
Last December, HDFC Bank sold 4 lakh shares worth ₹110 crore through a second sale transaction and reduced its holding to 8.95 per cent from 9.95 per cent. The average share acquisition cost with a face value of ₹10 was ₹2,750 a piece.
Subsequently, in March, the board of NSDL decided to reduce the face value of shares to ₹2 from ₹10, reducing the weighted average cost of acquisition for HDFC Bank to ₹550 a piece.
The proceeds from the IPO will accrue to selling institutions, while NSDL aims to achieve the benefits of listing the Equity Shares on BSE and enhance visibility and brand image
NSDL has 76 public shareholders of them top 12 hold a 93.33 per cent stake in the company. Of these 12, half are halving their stake in the IPO.