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The National Stock Exchange (NSE) of India is poised to book a staggering return of 6,415% on its early investment in National Securities Depository Limited (NSDL), with its Rs 59 crore stake now valued at Rs 3,840 crore, in the wake of NSDL’s Rs 4,012 crore IPO, which opened on Wednesday, July 30 and is expected to unlock significant value for its long-term shareholders.
NSE was among the earliest institutional backers of NSDL, India’s first and largest securities depository, having picked up a 24% stake, equivalent to 4.8 crore shares, at an average cost of just Rs 12.28 apiece. That investment, made well before NSDL’s public debut, has since appreciated sharply in value.
At the IPO’s upper price band of Rs 800 per share, NSE’s total holding is now worth Rs 3,840 crore, underscoring the windfall gains that long-term investors in India’s market infrastructure ecosystem are now beginning to realise.
Regulatory push triggers partial exit
As part of the IPO’s offer for sale, NSE is offloading 1.8 crore shares to comply with a regulatory mandate from the Securities and Exchange Board of India (Sebi), which caps institutional ownership in a depository at 15%. The dilution will reduce NSE’s stake from 24% to 15%, but not before it realises proceeds of Rs 1,418 crore from the partial sale, more than 24 times its entire original investment.
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The offer for sale is being driven not by profit-taking but by statutory requirements. “Our Shareholders, IDBI Bank Limited and National Stock Exchange of India Limited currently hold 26.10% and 24.00% of the paid-up Equity Share capital, respectively, of our Company, which is in excess of the maximum permissible limit of 15%,” NSDL stated in its Red Herring Prospectus. “Therefore… [they] are required to mandatorily dilute their respective shareholding.”
NSDL IPO opens to strong institutional interest
The NSDL IPO, open for public subscription from July 30 to August 1, comprises a sale of 5.01 crore shares by existing shareholders including NSE, IDBI Bank, State Bank of India (SBI), Union Bank of India, HDFC Bank, Canara Bank, and IIFCL. The shares are priced in a band of Rs 760 to Rs 800 and are set to list on the BSE on August 6.Ahead of the offering, NSDL raised Rs 1,201 crore from anchor investors by allotting 1.5 crore shares at Rs 800 each. Life Insurance Corporation of India (LIC) led the anchor book with a Rs 144 crore investment, followed by allocations to global and domestic institutions such as Small Cap World Fund, Fidelity Funds – India Focus Fund, SBI Mutual Fund, and the Abu Dhabi Investment Authority.
Public sector banks reap windfall gains
Several public sector shareholders are now set to monetise decades-old holdings at massive premiums. IDBI Bank, which acquired its stake at Rs 2 per share, is selling 2.22 crore shares for Rs 1,776 crore, translating to a return of nearly 39,900%.
SBI will net Rs 320 crore from the sale of 40 lakh shares, also purchased at Rs 2 apiece. Union Bank of India, with a more modest holding of 5 lakh shares bought at Rs 5.20, will realise Rs 40 crore, yielding over 15,000% in returns.
Even investors with higher acquisition costs are cashing in. HDFC Bank, which bought 20.1 lakh shares at Rs 108.29, is set to earn approximately Rs 139 crore from the sale. SUUTI (Specified Undertaking of the Unit Trust of India) is selling 34.15 lakh shares bought at Rs 2 for a total of Rs 273.2 crore.
For NSE and others, the NSDL IPO marks not just a compliance-driven divestment, but a rare value-unlocking moment in India’s tightly held financial market infrastructure sector.
Also read | NSDL IPO: Brokerages decode the Rs 4,011 cr issue; Here’s what they recommend
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