Kolkata: The NSE IPO price band as been announced. Each share will be offered between Rs 1,700 and 1,785. Post-IPO, NSE’s market capitalisation is expected
to be around Rs 4.4 lakh crore. For existing shareholders, the IPO presents a major opportunity to unlock value from long-held investments. The point of interest is that SBI will be selling a large number of shares which is bought for 80 paise apiece. SBI purchased these shares between 1993 and 1998.
SBI selling how many shares?
SBI is selling 15,969,410 shares in the NSE IPO. At the upper end of the price band, the bank could garner about Rs 2,850 crore from this sale, potentially yielding a staggering return of 223,025%. This issue is entirely an ‘Offer for Sale’ (OFS), meaning the proceeds will go to the selling shareholders rather than to the NSE itself.
According to reports, SBI held 79,847,050 shares of NSE before the IPO. It represents 3.23% stake. If it sells the maximum number of shares planned, it will offload approximately one-fifth of its holding, retaining around 63.88 million shares. At the upper end of the IPO price band, the value of these shares would be Rs 11,400 crore. SBI had initially acquired them between 1993 and 1999 at an average cost of just 80 paise per share; the initial investment amounted to Rs 1.98 crore.
Gains for New India Assurance Company
Reports state that some other shareholders acquired NSE shares at even lower prices. Therefore, the returns will be even higher than SBI, though they could be making a smaller total amount from the sale. New India Assurance Company is selling up to 10.5 million shares at a weighted-average acquisition cost of 32 paise per share. At a price of Rs 1,785, this sale could yield approximately Rs 1,874 crore, representing a gross return of 557,713%.
SBI Caps, Stock Holding Corp and GIC killing
SBI Capital Markets is selling up to 8,780,590 shares. Its weighted-average acquisition cost is 38 paise per share. And considering the upper end of the price band, this sale could generate around Rs 1,567 crore, marking a gross return of 469,637%.
Stock Holding Corporation of India is selling up to 6,187,500 shares, which were acquired at a weighted-average cost of 46 paise per share. At a price of Rs 1,785, this sale could yield about Rs 1,104 crore. This represents a gross return of 387,943%.
General Insurance Corporation of India could net around Rs 1,104 crore, marking a return of 33,835%.
(Disclaimer: This article is only meant to provide information. News9 does not recommend buying or selling shares or subscriptions of any IPO, Mutual Funds, precious metals, commodity, REITs, InvITs and any form of alternative investment instruments and crypto assets.)
