NSDL takes step towards IPO listing, files Draft Red Herring Prospectus

National Securities Depository Limited (NSDL), a registered market infrastructure institution (MII) under the Securities and Exchange Board of India (SEBI), is a prominent player in the Indian financial and securities markets. NSDL has now taken a significant step towards its listing by filing its Draft Red Herring prospectus with SEBI.

If the listing plans come to fruition, NSDL will become the second depository services company to be listed on domestic stock exchanges, following the successful market debut of its peer, Central Depository Services Limited (CDSL), in 2017. CDSL made a remarkable impact in the market, raising Rs 524 crore with its issue being subscribed a staggering 170 times.

NSDL holds a significant position in India's financial landscape, pioneering the dematerialization of securities in the country in November 1996 after the introduction of the Depositories Act 1996. As of March 31, 2023, NSDL remains the largest depository in India in terms of the number of issuers, active instruments, market share in the demat value of settlement volume, and value of assets held under custody, as stated in a report by CRISIL.

The upcoming initial public offering (IPO) of NSDL will consist of a pure Offer for Sale of up to 57,260,001 equity shares. The offer for sale includes different entities divesting their equity shares, namely, IDBI Bank Limited (up to 22,220,000 Equity Shares), National Stock Exchange of India Limited (up to 18,000,001 Equity Shares), Union Bank of India (up to 5,625,000 Equity Shares), State Bank of India (up to 4,000,000 Equity Shares), HDFC Bank Limited (up to 4,000,000 Equity Shares), and the Administrator of the Specified Undertaking of the Unit Trust of India (SUUTI) (up to 3,415,000 Equity Shares).

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Moreover, the offer also includes a reservation of equity shares for eligible employees, known as the "employee reservation portion." The company and the selling shareholders, in collaboration with the Book Running Lead Managers (BRLMs), may offer a discount on the offer price to eligible employees participating in the employee reservation portion (referred to as the "employee discount"). The remaining portion of the offer, excluding the employee reservation portion, is referred to as the "net offer."

The equity shares offered through the Red Herring Prospectus are planned to be listed on the Bombay Stock Exchange (BSE), as indicated in the Draft Red Herring Prospectus.

The Book Running Lead Managers overseeing the issue include ICICI Securities Limited, Axis Capital Limited, HSBC Securities and Capital Markets (India) Private Limited, IDBI Capital Markets & Securities Limited, Motilal Oswal Investment Advisors Limited, and SBI Capital Markets Limited.

The IPO of NSDL marks a significant milestone for the company, presenting an opportunity for investors to participate in the growth story of India's largest depository. As NSDL moves towards listing, it aims to strengthen its position in the financial and securities markets, leveraging its extensive range of products and services to further contribute to India's evolving economy.

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