NSE IPO could turn SBI's ₹2cr bet into nearly ₹5,000cr

NSE IPO could turn SBI's ₹2cr bet into nearly ₹5,000cr

The State Bank of India (SBI), India's largest lender, is poised to make a massive profit from its investment in the National Stock Exchange (NSE).

If NSE's upcoming initial public offering (IPO) is priced at ₹2,000 per share, SBI's shares could be worth nearly ₹4,950 crore.

The estimate comes from disclosures in NSE's draft red herring prospectus.

SBI plans to divest 2.475 crore shares

SBI plans to divest 2.475 crore shares through the offer for sale.

The lender's weighted average acquisition cost is just ₹0.8 per share, owing to decades of share issuances, bonus allotments, and capital restructuring.

At an assumed IPO price of ₹2,000 per share, the stake being sold would be worth nearly ₹4,950 crore—implying a notional gain of about ₹4,948 crore for SBI.

Other public sector investors also set to gain significantly

The potential gains from NSE's IPO aren't limited to SBI. Several other public sector institutions that had invested in NSE during their early years are also sitting on massive returns.

For instance, Bank of Baroda plans to sell shares worth about ₹2,197 crore. The acquisition cost of those shares is around ₹59 lakh.

Stock Holding Corporation of India Ltd., which bought its shares at ₹0.46 each, could monetize holdings worth about ₹2,178 crore against an investment of roughly ₹50 lakh.