The number of public investors has risen from 865 to 1,449 during April – September 2021 period.
Citigroup is the latest one to have likely sold an estimated 2.2 million shares at about Rs 3,275 apiece on behalf of its institutional clients, two market sources told ET. Wealth management services at Kotak and JM Financial groups have bid for those securities in the unlisted market for their wealthy individual clients. The final outcome of the bids will likely come out in the next few days, sources said.
Last month, IIFL Securities executed a deal running into a few lakhs of shares. IIFL Special Opportunities Fund, an alternative investment fund, sold those shares at about Rs 2,800 per share, more than trebling investment returns. It had invested about $160 million in NSE shares about three-four years ago in two different transactions.
“Institutions have gained substantially from NSE shares as they are keen on an IPO,” said Tushar Bopche, Co-founder of BrainStation India, a start-up incubator involved in the financial markets. “While the demand for unlisted shares keeps rising among wealthy individuals, some institutional investors appear to be running out of patience.”
NSE shares have surged over 85 per cent since April this year in the unlisted market, dealers said. Shares of India’s largest bourse currently change hands at Rs 3,300-3,500 per share, translating into a market capitalisation of around Rs 1.5 lakh crore.
Recently, Norwest Venture, an existing private equity investor in NSE sold some of the shares. It is now pending with the NSE board, which will have to approve it, without which any secondary market transaction on its unlisted shares remains null and void.
Some other PE players are seeking to exit through the secondary market route. US-based Elevation Capital (formerly known as SAIF Partners), Temasek are looking for potential exits, market sources said.
Individual investors and dealers did not respond to ET’s mailed queries. Citi declined to comment.
For the last five years, Sebi has not taken a decision on NSE’s IPO. In December 2016, NSE filed DRHP with Sebi for an IPO of Rs 10,000 crore. However, in February 2019, Sebi returned the DRHP, saying any decrease in the number of shares offered for sale by more than 50 per cent would require the new filing of the offer document as per the SEBI ICDR Regulations 2018.
In August, NSE wrote to the markets regulator seeking its approval to file the draft red herring prospectus (DRHP) to go public.
NSE has reported a revenue of Rs 6,202 crore for the year ended March 31, 2021, a 59 per cent jump over a similar period the previous year. Net profit has increased by 55 per cent to Rs 3,403 crore. NSE’s net profit margin is nearly 55 per cent. About 80 per cent of NSE’s revenue has been generated from the trading services business, which has seen a growth of 77 per cent in FY21 over a similar period in 2020.
Life Insurance Corporation, the biggest investor in the exchange, held a 10.72 per cent stake as of September 33, 2021. Aranda Investments holds a 5 per cent stake, while Stock Holding Corporation, SBI Capital Market Veracity Investment own 4.44 per cent, 4.33 per cent, and 3.93 per cent stake. Billionaire investor and founder of D’Mart Radhakishan Damani picked up a 1.58 per cent stake in the bourse last year.
