Soach Global set for nearly 25x gains in partial exit from NSE; to sell 20% stake in IPO

Soach Global Strategic Holdings Ltd, Mauritius, a wholly-owned subsidiary of Soach Global Opportunities Fund, is partially exiting its decade-old investment in the National Stock Exchange of India (NSE) through the exchange's initial public offering (IPO).

The fund is selling 16.5 lakh NSE equity shares, representing 20 per cent of its holding, through the IPO's offer for sale (OFS) component. The NSE IPO opened for subscription on September 17 and will close on September 21.

Soach Global acquired 1.5 lakh NSE equity shares from state-owned IFCI Ltd in January 2016 at Rs 3,950 per share, for a total investment of Rs 59.25 crore. Following corporate actions over the years, its holding increased to 82.5 lakh shares without any additional investment. Adjusted for these corporate actions, the fund's average acquisition cost stands at Rs 71.8 per share.

At the IPO price band of Rs 1,700-1,785 per share, the 16.5 lakh shares being sold will fetch approximately Rs 280-295 crore. According to the fund, the partial sale will realise nearly five times its entire original investment, translating into a return of roughly 25x.

Following the sale, Soach Global will retain 66 lakh NSE shares, representing 80 per cent of its current holding. At the IPO price band, the remaining stake is valued at around Rs 1,120-1,180 crore.

"Bharat is a fast-growing economy with a large number of growth-aspiring youngsters who are quickly learning the risks and rewards of participating in capital markets. We are participating in the offer for sale and selling a partial stake of what we own because we would like to see a large number of the mass retail population hold some stake of NSE. As these retail investors buy small stakes in NSE, directly or indirectly through mutual funds, they will also benefit from the growth of NSE, the same way we have by buying our stake over ten years ago. Of India's 1.4 billion people, only about 130 million are registered investors on NSE, and that is the opportunity," said Anubhav Dayal, Founder & Director, Soach Global Opportunities Fund.

"In our country, we have a culture of buying gold at a festival or for a ceremony. Gold, once purchased by a family, is held for a long time, even generations. It is sold only when in desperate need of money. Retail buyers can compare shares of NSE with buying gold. As a multi-asset-class trading platform, NSE will book growth in revenue while operating at a fixed cost, most of it already incurred. It is a high-technology platform settling trades in nanoseconds, and a multi-asset-class exchange: equity, commodities, electricity futures, bond index futures and coal. As India develops, the list of tradable products will only increase, adding to revenues on a largely fixed cost base. This will reflect in its price per share post-listing. This is a one-way partial exit and we have no plans of re-entering," he added.

The NSE IPO comprises an OFS of up to 13.11 crore equity shares.