SEBI approves NSDL’s initial public offering (IPO), paving the way for IDBI Bank and SBI to divest their stakes in the open market.

The Securities and Exchange Board of India (SEBI) has cleared the Initial Public Offering (IPO) of National Securities Depository Limited (NSDL). As a result, India’s two major banks, IDBI Bank and State Bank of India (SBI), will be able to sell their stake in NSDL through an Offer for Sale (OFS). The OFS will enable the banks to pare their shareholding in NSDL, which has been increasing steadily over the years. The exact date for the OFS has not been announced yet, but it is expected to take place in the near future. NSDL is one of the two depositories in the country, along with Central Depository Services (India) Ltd (CDSL). The depository plays a crucial role in reducing paperwork and streamlining the settlement process in the capital market. With the SEBI’s clearance, the OFS is likely to attract institutional investors, high net worth individuals, and other eligible investors. The OFS will help the banks to reduce their stake in NSDL, which stood at around 16.8% each, as of the end of September 2022.