The Securities and Exchange Board of India (SEBI) has received the Draught Red Herring Prospectus that National Securities Depository Limited (NSDL), a SEBI-registered market infrastructure institution (MII) offering a wide range of products and services to the Indian financial and securities markets, has submitted.
NSDL will become the second depository services company to be listed on the domestic bourses if the listing plans are successful. Following the successful market debut of rival Central Depository Services Limited (CDSL) in 2017.
CDSL raised Rs 524 crore with a record 170 times subscribed issue.
In November 1996, NSDL led the dematerialization of securities in India after the Depositories Act was passed in that year. As of March 31, 2023, the company 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 a CRISIL report.
Up to 57,260,001 equity shares may be offered for sale in the initial public offering (IPO).
Up to 22,220,000 equity shares from IDBI Bank Limited, up to 18,000,001 equity shares from National Stock Exchange of India Limited, up to 5,625,000 equity shares from Union Bank of India, up to 4,000,000 equity shares from State Bank of India, up to 4,000,000 equity shares from HDFC Bank Limited (SS), and up to 3,415,000 equity shares from Administrator of the Specified Undertaking of the Unit Trust of India (SUUTI) are included in the offer for sale of equity shares.
The employee reservation element of the offer involves a reservation of equity shares for subscription by qualified employees. The company and the selling shareholders, in consultation with the BRLMs, may offer a discount of the offer price to the eligible employees bidding in the employee reservation portion (employee discount), the offer less the employee reservation portion is hereinafter referred to as the ‘net offer’.
According to the DRHP, the equity shares made available through the Red Herring Prospectus are suggested for listing on the BSE.
The book running lead managers for the issue are 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.
Can NSDL match CDSL’s visionary market debut?
Through its extensive network of Depository Partners, NSDL, which was founded in 1996. It is directed by MD and CEO Padmaja Chunduru, offers a comprehensive range of services to investors, stockbrokers, custodians, and issuer firms.
According to its DRHP, as of March 31, 2023, it was India’s largest depository in terms of issuer count, active instrument count, market share in demat value of settlement volume, and value of assets kept in custody.
“As of March 31, 2023, we had over 31.46 million active demat accounts with 283 depository participants registered with us. Our account holders were spread over more than 99 percent of India’s pin codes as well as 186 other nations. As on March 31, 2023, we had an aggregate of 40,987 issuers registered with us. We witnessed a net increase of 3,509 issuers registered with us during Financial Year 2023. Furthermore, the average number of Demat Accounts opened with us per day in Financial Years 2021, 2022 and 2023 was 6,840, 15,528 and 15,139, respectively,” the DRHP said.
The statement said, “As of March 31, 2023, we serviced 99.99% of the value of equity, debt, and other securities held in dematerialized form by foreign portfolio investors in India.”
NSDL has introduced other services in addition to depository services. It began offering PAN card services, an online tax accounting system, and the online uploading of central excise challan data in 2004 and 2005, respectively. The company launched a mobile phone share delivery service in 2007. It was chosen in 2011 to serve as the Unique Identification System’s registrar, which produced the Aadhaar card. The NSDL expanded into banking services in 2015. It received permission from the RBI to launch a payment bank alongside 10 other players.
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