NSE IPO Update: How State Bank of India Stands to Gain Rs 5,000 Crore From the Mega Listing

NSE IPO Update: India's largest public lender, State Bank of India, is set to generate one of the most lucrative windfalls in recent years with the initial public offering (IPO) of the National Stock Exchange. The much-awaited NSE IPO is worth Rs 30,000 crore and is touted as one of the biggest IPOs in Indian stock market history.

The NSE IPO is likely to turn into a jackpot for SBI as it is expected to monetise patient capital with a whopping 256,775% profit for the lender, as per an Economic Times report.

NSE IPO

NSE filed its Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) on Wednesday, June 17. The Rs 30,000 crore IPO is expected to be an entirely offer for sale (OFS) and stands to surpass all the previous public offerings in issue size.

SBI Stake in NSE IPO

SBI is expected to sell 24,750,000 equity shares in the offer for sale. The bank had acquired these shares between 1993 and 1999 at an average cost of about 80 paise each, as per ET report.

Its original investment was roughly Rs 1.98 crore, making the potential gain unusually large even by long-term equity investment standards.

How Much SBI Stands To Gain From NSE IPO?

Based on an unlisted market price of Rs 2,055 per share, SBI's stake sale could fetch around Rs 5,086 crore, as per ET report. That implies an estimated return of about 2,568 times on the portion being sold. The figure does not include the value of any remaining NSE shares that SBI may continue to hold after the public issue.

Other Companies To Gain From NSE IPO

SBI is not the only institution positioned for a large gain. Several public sector and institutional shareholders acquired NSE shares at very low historical prices, long before the exchange became the central venue for India's equity and derivatives markets. The listing gives these investors a formal route to monetise holdings that have remained largely illiquid for years.

The New India Assurance Company and National Insurance Company are reported to have among the lowest acquisition costs, at about 32 paise per share. At current unlisted market indications, their returns could be several thousand times the original cost on the shares they sell.

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