SEBI has officially approved the long-awaited IPO for the NSDL

The Securities and Exchange Board of India (SEBI) has officially approved the long-awaited initial public offering (IPO) for the National Securities Depository Limited (NSDL)

The Securities and Exchange Board of India (SEBI) has officially approved the long-awaited initial public offering (IPO) for the National Securities Depository Limited (NSDL), marking a significant development for the Indian capital market. NSDL, which manages most of the securities held in dematerialized form, initially filed its Draft Red Herring Prospectus (DRHP) on July 7, 2023. However, SEBI had placed the DRHP in abeyance in August due to an ongoing investigation and delays in required information from the company and regulatory bodies. Once the NSDL IPO is launched, it will consist solely of an offer for sale (OFS), with key stakeholders planning to divest their stakes, including the National Stock Exchange (NSE) and IDBI Bank. The proposed issue will see approximately 57.3 million shares sold by six shareholders. Specifically, IDBI Bank intends to sell up to 22.2 million shares, while NSE will sell 18 million. Other participants in the sale include Union Bank of India, State Bank of India, the Specified Undertaking of the Unit Trust of India (SUUTI), and HDFC Bank.

In anticipation of the NSDL IPO, shares of HDFC Bank experienced a boost, rising over one per cent on October 8, trading at Rs 1,636.6 per share on the NSE. HDFC Bank currently holds an 8.95 per cent stake in NSDL and plans to sell a two per cent stake in the forthcoming IPO. This movement reflects positive sentiment around the impending sale and the bank’s involvement. Upon its listing, NSDL will join the ranks of publicly listed depository services companies in India, becoming the second such entity to do so after the successful market debut of the Central Depository Services Limited (CDSL) in 2017. In contrast, CDSL’s stock declined by over one per cent on the same day, trading around Rs 1,355 per share. The approval of NSDL’s IPO represents a key milestone in enhancing the capital market’s infrastructure. It reflects growing investor interest in the financial sector. As the market prepares for this significant listing, stakeholders are eager to witness how the IPO unfolds and its broader implications for the Indian economic landscape.