NSE IPO Turns Rs 59 Crore Bet Into Big Payday, Soach Global Eyes Nearly 25 Times Return

Mauritius-based Soach Global Strategic Holdings is reaping a significant return from its decade-old investment in the National Stock Exchange (NSE), with the company's IPO potentially delivering nearly 25 times its adjusted acquisition cost. In a move that allows 20% of its NSE stake to be sold on the market, Soach Global retained the remaining shares for a long-term investment.

Soach Global, a wholly-owned subsidiary of Soach Global Opportunities Fund, purchased 1.5 lakh NSE shares from Industrial Finance Corporation of India (IFCI) in January 2016 for Rs 3,950 per share, resulting in an initial investment of Rs 59.25 crore. Over the subsequent decade, corporate actions saw the fund's holding increase to 82.5 lakh shares, all without any additional investment. This means the adjusted acquisition cost is now approximately Rs 71.8 per share.

The IPO involves the sale of 16.5 lakh shares, with an IPO price range of Rs 1,700 to Rs 1,785 per share. Based on the upper end of this range, these shares are valued at roughly Rs 280 crore to Rs 295 crore, nearly 25 times the fund's adjusted acquisition cost per share.

Interestingly, Soach Global is selling only one-fifth of its total NSE holding, with the remaining 66 lakh shares potentially valued at around Rs 1,122 crore to Rs 1,178 crore, depending on the IPO price band. Anubhav Dayal, Founder and Director of Soach Global Opportunities Fund, explained that the fund's decision to retain 80% of its NSE shares is to provide retail investors with the opportunity to own shares of NSE.

Dayal compared the NSE's shares to gold, a long-standing investment in India, thus suggesting that investors could view NSE as a long-term asset.

It is important to note that the NSE IPO is an offer for sale, meaning that NSE will not receive any fresh funds from the issue; instead, the proceeds will go to the selling shareholders.