NSE IPO hits share allocation hurdle before Sebi observations

Mumbai: 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.