As many as 10 bidders have evinced interest in picking up stake in Stock Holding Corporation of India Ltd (SHCIL) following IFCI’s decision to sell up to 26 per cent in India’s largest custodian of securities.

In 2014, IFCI had acquired IDBI Bank’s 18.95 per cent stake in SHCIL at ₹851 per share to take the total holding to 52.86 per cent. According to sources close to the development, IFCI could get up to 30-40 per cent premium now.

When contacted, Malay Mukherjee, Managing Director and CEO, IFCI, said the deal will be done by the end of the month.

Ernst & Young LLP is the consultant to IFCI for advising and managing the disinvestment process. The last date for submitting bids was March 1. Bidders were required to have a net worth or assets under management of ₹100 crore or more as on December 31, 2015 or March 31, 2015 for being shortlisted and considered for the subsequent process for the transaction.

The IFCI board had given its go-ahead for the stake sale in the first week of January.

The process

Shortlisted bidders will be allowed to do a due diligence on SHCIL after signing a confidentiality agreement. After that, a binding bid would be submitted by each bidder through a competitive bidding process and the sale of SHCIL’s shares would be completed thereafter.

The likelihood of SHCIL coming out with its initial public offering in the next 15-18 months is also high, with SBI Caps doing pre-IPO advisory to the custodian, sources said.

Merchant bankers for the IPO are yet to be appointed and the manner in which the IPO would be structured is yet to be firmed up, according to sources.

A debt-free company, SHCIL is also weighing its options of inducting a strategic investor, preferably a multilateral agency, sovereign wealth fund or entities interested in investing a financial market infrastructure company, before finally deciding to launch its IPO.

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