- NSE has filed an update to its draft IPO prospectus with SEBI two months after the original DRHP.
- The IPO offer size remains 14.89 crore shares, unchanged but split between SBI and SBI Capital Markets.
- SBI Capital Markets holds a 4.33% stake in NSE, larger than SBI’s 3.23%, and now enters the offer for sale.
The National Stock Exchange filed an update to its draft IPO prospectus with Sebi on Tuesday, two months after the original draft red herring prospectus (DRHP) was submitted in June.
A line-by-line check against the DRHP throws up three things worth knowing.
1. Offer size has not grown, it has been split
In the original DRHP, State Bank of India alone was down to sell up to 2.475 crore shares in the IPO, at a disclosed cost of 80 paise a share. The latest filing splits that very same block into two: SBI will now sell 1.59 crore shares, and its subsidiary SBI Capital Markets will sell 87.8 lakh shares. The two numbers add up to exactly 2.475 crore, the same figure as before. The overall IPO size of 14.89 crore shares, one of the largest offer-for-sale issues in Indian market history, remains untouched. What has changed is the composition within the SBI group, not the scale of the offer.
2. SBI Capital Markets is a bigger NSE shareholder than SBI itself
According to the DRHP's own shareholding table, SBI Capital Markets holds 10.73 crore shares in NSE, a 4.33 per cent stake that makes it the exchange's fourth-largest shareholder. That places it ahead of Aranda Investments and Stock Holding Corporation of India, and notably ahead of its own parent, SBI, which holds 7.98 crore shares (3.23 per cent) and ranks sixth. Despite holding the larger stake of the two, SBI Capital Markets did not feature anywhere in the original list of selling shareholders in June. It enters the offer for sale only with this filing, and its acquisition cost of 38 paise a share is being disclosed for the first time, since as one of the IPO's book-running lead managers rather than a seller, it was not previously required to show this.
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3. Three-year cost-of-acquisition revised
The DRHP discloses the weighted average cost at which all selling shareholders acquired their NSE shares, split by lookback period. The one-year and 18-month figures, Rs 1,909.02 and Rs 1,747.54 respectively, are unchanged in the latest filing. But the three-year figure has moved from Rs 229.23 in the original DRHP to Rs 205.86 now, a cut of nearly 10%. This is likely the result of SBI Capital Markets' stock being folded into the pool of selling shareholders for the first time.
Investors and the public now have a fresh 21-day window from the date of this filing to raise comments with SEBI, a step that could have a bearing on how soon NSE's final red herring prospectus and IPO timeline are locked in.
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