Upcoming IPO: Rival Of CDSL, NSDL Mulls To Launch Rs 3,000 Crore Public Offer Next Month ; Key Details

Settlement and depositary company, National Securities Depository Ltd (NSDL ) is likely planning to launch its initial public offering (IPO) of Rs 3,000 crore in April. NSDL is a rival of CDSL which is already listed on the NSE. That being said, after the IPO, NSDL will list on BSE. The market regulator approved the draft prospectus of the IPO last year, and NSDL has until September 2025 to launch its issue.

NSDL's IPO move is to comply with Sebi's regulation of single-entity ownership in market infrastructure institutions to 15%. However, the rule had a five-year compliance window which ended in October 2023.

Stock exchange, NSE which is the parent company of NSDL, had sought an extension from the market watchdog to comply with the ownership regulations. NSE currently holds about 24% of NSDL. This move has delayed NSDL's IPO.

NSDL IPO:

NSDL first filed its IPO draft in July 2023, and due to Sebi's suspension of ownership rule between August and December of that year, the IPO was delayed. NSDL received its approval in September 2024. That being said, Sebi's approval is valid for one year, ending in September 2025.

Officials told PTI "Our dates are expiring next month. We are rushing against time to get things done fast. We will try (to launch the IPO before that)."

The official said that the National Securities Depository Ltd (NSDL), as a market infrastructure institution (MII), also needs other approvals apart from the draft red herring prospectus, adding that this approval has a looming deadline.

Although Sebi's 12-month approval window will end in September 2025, the regulator's MII approval has pushed NSDL to expedite the process.

From the draft prospectus, the NSDL IPO will be entirely offer for sale (OFS) where selling shareholders will offload up to 57,260,001 equity shares. The selling shareholders are IDBI Bank, NSE, and Union Bank of India. The face value of the IPO is Rs 2 per equity share.

Under the OFS, IDBI Bank will offload 22,220,000 shares, while NSE will sell 18,000,001 shares and Union Bank will sell 5,625,000 shares.

Of the total size. 50% is likely to be allocated to qualified institutional buyers, while 15% of the IPO will be allotted to non-institutional investors (NII). The rest of 35% of the total size will be kept for retail individual investors.

Since the entire IPO is OFS, NSDL will not be able to utilise the proceeds of the IPO. Selling shareholders will receive the proceeds.

NSDL is SEBI registered market infrastructure institution ("MII") offering a wide range of products and services to the financial and securities markets in India. As of March 31, 2023,
NSDL is the largest depository in India in terms of number of issuers, number of active instruments, market share in demat value of settlement volume and value of assets held under custody, as per CRISIL report.

As on March 31, 2023, the company had over 31.46 million active demat accounts held with 283 depository participants registered with under NSDL, and its accounts holders were located in more than 99% of pin codes in India and 186 countries across the world. As on March 31, 2023, the company had an aggregate of 40,987 issuers registered with them. Also, the company witnessed a net increase of 3,509 issuers registered with us during Financial Year 2023. Furthermore, the average number of Demat Accounts opened with NSDL per day in Financial Years 2021, 2022 and 2023 was 6,840, 15,528 and 15,139, respectively, as per CRISIL report.

Additionally, NSDL also held assets in custody aggregating to Rs 43,060.50 billion for individuals (including NRIs) and Hindu Undivided Family ("HUFs") accounts, which constituted 71.79% of the total value of such assets under custody in dematerialized as of March 31, 2023 (Source: CRISIL Report).

Book-running lead managers of the IPO are ICICI Securities, Axis Capital, HSBC Securities and Capital Markets (India), IDBI Capital Markets & Securities, Motilal Oswal Investment Advisors, and SBI Capital Markets. The registrar of the IPO is Link Intime India.