The country’s top bourse, the National Stock Exchange (NSE), has sought an extension of six months from the markets regulator to bring down its shareholding in National Securities Depository (NSDL), said people with direct knowledge of the development.
Five years ago, Sebi had directed any entity holding more than 15 per cent in a depository to pare down their holding before October 2, 2023.
Currently, NSE and IDBI Bank hold 26.1 per cent and 24 per cent in NSDL, the country’s biggest depository in terms of assets under custody. In the proposed IPO, IDBI is diluting an 11.1 per cent stake and NSE is diluting a 9 per cent stake in order to become compliant with the Sebi regulation.
“NSE wants to abide by the regulations and thus filed a draft red herring prospectus (DRHP) for NSDL to bring down the shareholding. Now we have placed a request for an extension,” said a source familiar with the matter.
According to people in the know, NSE has requested time until April 2024 to comply with the regulations.
“NSE has submitted a request. The exchange is coordinating with Sebi on compliance,” said another source.
Queries sent to NSE and NSDL did not elicit any response.
NSDL had filed its draft red herring prospectus (DRHP) with Sebi on July 7. Besides NSE and IDBI Bank, four others are looking to pare their holding in the depository.
Investment banking sources said the regulator puts any IPO on hold if there is a pending regulatory investigation or if information sought from the company or other regulatory bodies is not received on time. Typically, an issue is kept in abeyance for 90 days. Earlier, news reports indicated that bankers had made a request to reduce the abeyance period to 45 days to allow NSE and IDBI Bank to sell their stakes within the stipulated time period.
In June, BSE diluted around a 5 per cent stake in the Central Depository Services (CDSL) by selling shares in the open market to comply with the norms.