The proposed going publics (IPOs)of the National Stock Exchange (NSE) and SBI Mutual Fund are set to provide a double gold mine– substantial gains for offering investors and a large tax windfall for the Centre.
Because both the problems are completely ‘market’, the offering investors will need to pay long-lasting capital gain tax at 12.5 percent, based on modification of the acquisition expense and exemptions offered under the law. A back-of-the-envelope estimation recommends that the 30,000 crore NSE IPO might bring the federal government 3,700-3,800 crore.
The federal government is anticipated to amass about 1,500-1,600 crore from the approximated 13,000 crore SBI Mutual Fund IPO.
Mega tax haul
Per Section 112A of the Income Tax Act, long-lasting capital gains are taxed at a concessional rate of 12.5 percent on revenues going beyond 1.25 lakh, without the advantage of indexation.
Amongst the popular investors unloading stakes in the NSE IPO are State Bank of India (2.47 crore shares ), MS Strategic(Mauritius)(1.60 crore shares ), Canada Pension Plan Investment Board (1.19 crore shares) and Aranda Investments (Mauritius) Pte Ltd (1.12 crore shares). Bank of Baroda, Stock Holding Corporation of India, and insurance providers GIC Re and New India Assurance will each offer in between 1.05 crore and 1.09 crore shares.
The promoters of SBI Mutual Fund– State Bank of India and Amundi India Holdings– strategy to offer 12.83 crore and 7.53 crore equity shares, respectively, through the IPO.
On June 17, the NSE officially submitted its Draft Red Herring Prospectus (DRHP) with SEBI for a 100 percent OFS problem. Existing investors are watering down almost 6 percent of their holdings, and the bourse is anticipated to command an appraisal of over 5-lakh crore.
Tax treatment
Manoj Purohit, Partner and Leader, Financial Services Tax, Tax & & Regulatory Advisory, BDO India, stated, “The capital gains tax structure draws a clear difference in between noted and unlisted monetary possessions, mainly through the lens of holding duration.”
To certify as ‘long-lasting’, noted equity shares and equity-oriented shared funds take pleasure in a reasonably much shorter limit, where gains end up being long-lasting after 12 months of holding and are taxed at 12.5 percent (plus appropriate additional charge and cess).
On the other hand, financiers in unlisted shares and specific classifications of shared funds (besides equity-oriented) should hold these properties for a minimum of 24 months for them to certify as long-lasting capital property and end up being qualified for the concessional tax rate.
While there are no particular exemptions from capital gains tax, business financiers and investors mostly depend on balancing out losses where readily available.
The leading 10 investors taking part in the NSE OFS are anticipated to pocket gains of about $2.6 billion (24,600 crore), based upon acquisition rates divulged in the draft prospectus.
State Bank of India alone is approximated to understand gains of around 4,700 crore, while MS Strategic (Mauritius), a Morgan Stanley fund, might make around 2,934 crore, according to Reuters estimations based upon prospectus disclosures and evaluation price quotes.
Released on June 23, 2026
