NSE IPO: SEBI observations await completion of share allocation between SBI, SBICAPS

Mumbai, Aug 23 (IANS) The Securities and Exchange Board of India’s (SEBI) observations on the proposed initial public offering (IPO) of the National Stock Exchange (NSE) are awaiting completion of a share allocation process between State Bank of India (SBI) and SBI Capital Markets Ltd (SBICAPS), a highly placed source said. 

The development comes after a change in the selling shareholder structure for the NSE IPO, with SBICAPS joining SBI as a selling shareholder. The two SBI group entities will now split the shares that were earlier proposed to be sold by SBI.

Under the revised arrangement, SBI will sell up to 15.97 million NSE shares, while SBICAPS will sell up to 8.78 million shares. The overall size of the offer remains unchanged.

The transfer and allocation of shares between the two SBI group entities is expected to take some time. Once completed, the revised shareholding structure will be formally reflected in NSE’s draft red herring prospectus (DRHP).

NSE has already updated its DRHP through an addendum to reflect the revised allocation of shares among the selling shareholders.

According to the source, the change needs to be completed and the corresponding details incorporated into the DRHP before SEBI can process the IPO application further and issue its observations.

The proposed NSE IPO comprises an offer for sale (OFS) by existing shareholders and does not involve any fresh issue of shares by the exchange. Therefore, the restructuring of the selling shareholders does not alter the overall size of the proposed offering.

SBICAPS’ inclusion as a selling shareholder is also significant as the company is one of the lead merchant bankers advising on the NSE IPO. The firm will therefore have a dual role in the transaction, being part of the SBI group entities involved in the revised share allocation as well as among the investment banks managing the issue.

The NSE has been working towards its much-anticipated public listing, with the IPO expected to be one of the most closely watched capital market transactions in India.

The latest change is primarily an internal restructuring of the shareholding among SBI group entities and does not increase the proposed offer size. However, the necessary share transfer, documentation and updates to the DRHP need to be completed before the regulatory process can move forward.

--IANS

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