Small investors bump up stake in NSE on hopes of listing

Retail investor holding in the exchange rose to 9.5% in the December quarter (Q3FY24) from 8.75% in Q2FY24, data shows. However, the bourse’s MD & CEO Ashishkumar Chauhan said at an investor call on Monday that there was “no information” to share on the IPO and listing would happen after Sebi approved the exchange’s application for the same.

The retail count holding of the shares rose to 8,710 from 7,303 at the end of September quarter. HNIs or retail category holding above ₹200,000 each also hiked stake in the bourse to 3.62% in the December quarter from 3.49% in the preceding quarter. Of the total equity stake held by HNIs, veteran investor Radhakishan Damani kept a 1.58% stake.

The hike in the share of resident entities is borne by huge transfers of NSE shares from non-residents and foreign-controlled Indian entities (ind-irect foreign investment) to residents in December.

For instance, on 12 December, an NRI sold 1.17 million shares to a resident at ₹3,060 apiece in a transaction valued at ₹3.57 billion. On 21 December, an indirect foreign investor sold 650,400 shares at ₹3,075 a share to a resident for ₹1.99 billion.

“The interest of Indian inv-estor, small or rich, is underp-inned by expectations of NSE’s listing,” said SK Joshi, ED, Khambatta Securities. “The wait has been long and share price has risen over time.”

The share price rise was cited by a Hyderabad-based broking official who suggested that pending the IPO, NSE could issue bonus shares to make the price affordable for small investors. Chauhan said the board could consider this.

Some deals reported to the exchange in December took place between ₹2,880 and ₹3,800 per share. Against this, some transactions were at ₹2,950-3,500 in November, NSE data showed.

Another concern shareholders highlighted related to the delay in transfer of the unl-isted shares among entities. Chauhan said in 80-85% of the cases transfers had been done in 10 days, down from 2-3 months. But, in some cases delays related to due diligence for certifying a potential shareholder as “fit and proper” and in others to brokers not transferring the share certificates to the exchange in time.