NSE IPO: Stake-Selling Shareholders Under Pressure As SBI, GIC Re, IFCI, BoB Stocks Decline

Mumbai, September 9: Shares of companies set to monetise their holdings in the upcoming National Stock Exchange (NSE) IPO were largely under pressure on Wednesday, with SBI, GIC Re, New India Assurance, Bank of Baroda and IFCI trading lower amid weakness in the broader market. The declines come as investors assess the potential value-unlocking benefits from the NSE’s proposed offer for sale (OFS), with the exchange’s public listing drawing closer. 

The NSE IPO is expected to be entirely an OFS, meaning the exchange itself will not receive proceeds from the sale. Ten existing shareholders are expected to sell a combined 148.9 million NSE shares, equivalent to about 6% of the exchange’s equity under the earlier structure. The IPO could raise around ₹30,000 crore, although reports on Wednesday indicated that the issue size could potentially be reduced to around ₹24,000-25,000 crore. 

SBI Share Price 

SBI is the largest listed selling shareholder in the NSE IPO and is expected to offload around 2.47 crore NSE shares. The bank holds about 4.4% in NSE, with its holding acquired at an average cost of just ₹0.80 per share. 

SBI shares traded 0.26% lower today at Rs 1,005.40 amid weakness in the markets. The stock remains significantly below its 52-week high of ₹1,234.70. 

The NSE listing could provide SBI with a substantial value-unlocking opportunity given the extremely low acquisition cost of its exchange holding. However, investors are likely to track whether the expected monetisation is already reflected in SBI’s valuation. 

New India Assurance Share Price 

New India Assurance (NIACL) is another key beneficiary of the NSE listing. The insurer is expected to sell around 1.05 crore NSE shares from its 1.42% holding. Its NSE shares were acquired at an average cost of just ₹0.32 apiece. 

NIACL shares were trading 1.33% lower at Rs 202.50, extending their decline from the previous session. The stock had gained 17.6% on September 4. 

GIC Re Share Price 

General Insurance Corporation of India (GIC Re) is expected to sell up to 1.06 crore NSE shares from its holding of around 4.07 crore shares. The insurer had acquired its NSE stake at an average cost of ₹5.26 per share. 

GIC Re shares were trading 1.13% lower at Rs 344.15, declining for a third day. Its 52-week range stands at ₹341.60-₹417.95. 

Bank of Baroda Share Price 

Bank of Baroda is also set to monetise its NSE investment and is expected to sell around 1.1 crore shares. The bank’s NSE stake was acquired at an average cost of only ₹0.54 per share. 

The stock declined 0.3% at Rs 235.81, continuing its losing streak. The stock is down over 2% in a week and nearly 6% in a month. 

IFCI Share Price 

IFCI has an indirect link to the NSE IPO. The company owns 52.9% of Stock Holding Corporation of India, which itself is among the NSE shareholders participating in the OFS, holding 4.4% of the exchange. Stock Holding is expected to sell 1.09 crore NSE shares. 

IFCI has been one of the most actively traded stocks on expectations of value unlocking from the NSE listing. However, the stock was down 4% at Rs 89.00 as of writing, extending its sharp fall in the previous session. The stock is down 9% in a week but up 20% over a month. 

NSE IPO Could Unlock Significant Value 

The NSE IPO has generated considerable interest among shareholders because several of them acquired their holdings at exceptionally low prices. SBI, Bank of Baroda, GIC Re and New India Assurance could therefore realise substantial gains when their NSE shares are sold through the IPO. 

Reuters reported that NSE could be valued at around ₹4.4 lakh crore at the top end of a reported IPO price band of ₹1,700-₹1,785 per share. The exchange is targeting a listing in the week beginning September 21, although the final issue structure and pricing are yet to be formally announced. 

For investors, therefore, the NSE IPO is not only a landmark primary-market event but also a potential value-unlocking trigger for its listed shareholders, with SBI, GIC Re, New India Assurance, Bank of Baroda and IFCI likely to remain on the radar as the listing approaches. 

Source: NSE