The National Securities Depository Limited (NSDL) has recently announced its plans to go public, filing its Draft Red Herring Prospectus (DRHP) for an Initial Public Offering (IPO) on July 7, 2023. This news has significantly stirred the Indian securities market as this IPO marks a comprehensive Offer For Sale (OFS) by the existing shareholders of NSDL. An impressive roster of financial institutions, including IDBI Bank, SBI, HDFC Bank, Union Bank, and the National Stock Exchange (NSE), are prominent shareholders in NSDL. These institutions are gearing up to offload their stakes in this impending IPO. In this ensemble of shareholders, the NSE holds a substantial chunk of NSDL with a total of 48 million shares. As the IPO approaches, the NSE is prepared to sell approximately 18 million shares from its existing pool. As per the DRHP, the NSE acquired these shares at an average price of Rs 12.28 per share. This scenario brings us to the pivotal question - what valuation is NSDL targeting for its IPO? Taking a comparative approach with Central Depository Services (India) Limited (CDSL), NSDL's listed peer, provides a preliminary insight. The current market capitalization of CDSL stands at Rs 12,000 crores. However, NSDL significantly overshadows CDSL by generating double its revenue and boasting a considerably higher cash flow from operations. Considering these factors, it is reasonable to speculate that NSDL might target a higher valuation for its IPO, possibly around Rs 15,000 crores and with 20 cr shares outstanding as on 31.03.2023, the price per share could be ~750 per share. To give a broad estimate of the potential income for NSE from this IPO, we can multiply the anticipated per-share price by the number of shares being sold. As per the provided calculation, "= Rs 750 * 18 million = Rs 1,350 crores." For NSE shareholders, the NSDL's IPO could open a windfall of benefits. The additional income garnered from this IPO could drive the NSE's profitability up in the years to come and potentially boost dividend payouts. This is certainly an event to watch out for, promising a reshaping of the market landscape. Remember, these calculations are preliminary, and the official IPO price band announcement will provide the final valuation. The NSE, which is planning a significant divestment in this IPO, could benefit significantly from this high valuation. The upcoming IPO of NSDL promises to be an intriguing event for all market participants, with the potential to reshape the landscape of the securities market. It is essential for potential investors and existing shareholders to stay updated and make informed decisions. Stay tuned to our platform as we continue to deliver comprehensive and insightful content navigating the complex yet fascinating world of investments and capital markets.