Marquee funds trim NSE holdings due to lack of IPO visibility, limited fund life cycle, leading to share sales

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A clutch of marquee funds have trimmed their holdings on the National Stock Exchange (NSE) in 2023-24, given the lack of IPO visibility and the limited life cycle of the funds.

Elevation Capital has offloaded its entire holding of 68 lakh shares during the year, held through SAIF II SE Investments Mauritius, data from the exchange shows. Based on prices in the unlisted market, the share sale would have fetched ₹2,300-3,200 crore. Acacia Banyan Partners has sold its entire holding of over 78 lakh shares.

TA Asia Pacific Acquisitions, PI Opportunities Fund, Ontario Inc, and Crown Capital have trimmed their holdings, offloading anywhere from 13 lakh to 33 lakh shares (see table).

“We all have limited life funds and have to return money after a certain number of years. With zero visibility of the IPO, we have been forced to sell at lower rates. We have made money, but the IRR is nothing special because of the long holding period,” said one of the fund partners.

General Atlantic, the NYSE Group, Elevation Capital, and Goldman Sachs were among the first group of foreign investors to acquire a 5 per cent stake each in the NSE in 2007. In the same year, Morgan Stanley, Citigroup, and Actis purchased 3 per cent, 2 per cent and 1 per cent, respectively, in the exchange.

Citigroup, Goldman Sachs, and Norwest Venture Partners sold their entire stake in FY22.

In response to a question on the IPO during a call with analysts last month, the bourse’s Managing Director and CEO, Ashishkumar Chauhan, said: “We don’t have a comment on the IPO to be made; the situation remains as is.”

An email sent to NSE did not immediately get a response.

NSE’s shareholding has become a lot more diffused, with high-net-worth individuals and family offices lapping up its shares in the past few years. Over 10,000 resident individuals under the public shareholder category held shares amounting to 13.8 per cent of the total shareholding as of March 31, 2024. The comparable figure for the previous year was 4,341 shareholders holding 10.72 per cent.

The bourse’s shares have seen a 75 per cent spurt in the past year in the unlisted market.