SEBI Observations Pending Share Allocation
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), according to a highly placed source, as reported by Lokmat Times.
The development follows 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 97 million NSE shares, while SBICAPS will sell up to 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.
SBI Group's Stake Sale Plans
SBI and its subsidiary SBI Capital Markets Ltd together plan to dilute up to 1 per cent stake in the NSE through the exchange's proposed Rs 30,000-crore IPO, as reported by Moneycontrol. The bank is participating in the NSE IPO and will dilute a 65 per cent stake in the exchange, SBI Chairman C S Setty told PTI in an interview.
"We are participating in that divestment. We propose to divest 65 per cent and 35 per cent by SBI Capital Markets because both of us hold the stake. So together, about 1 per cent as a SBI group… it could be less depending on any other shareholders joining," he said.
SBI currently holds a 23 per cent stake in the NSE, while SBI Capital Markets owns 33 per cent in the country's largest stock exchange. He clarified that there is no monetisation plan for other subsidiaries in the immediate future.
Recent SBI Divestments and Home Loan Portfolio
Last month, SBI, along with its foreign partner Paris-headquartered Amundi, diluted around 10 per cent stake in SBI Mutual Fund. Setty said the mortgage portfolio is set to cross an important milestone of Rs 10 lakh crore in the current quarter on the back of robust demand. The country's largest lender had surpassed Rs 9 lakh crore home loan portfolio during the last financial year. "We should be reaching the Rs 10 trillion-mark, hopefully in this quarter itself," he said.
SBI has a market share of nearly 28 per cent in the home loan segment, he said, adding that the bank has focused on making home loans accessible across the country. The lender has more than 460 home loan processing centres across India, increasing accessibility of its housing finance products.