• Source:PTI

National Stock Exchange's (NSE) initial public offering will soon hit the primary market as the exchange secured market regulator Sebi's approval. The approval for the much-awaited IPO, estimated at around Rs 30,000 crore, has paved the way for one of the largest public issues in the history of the Indian stock market.

According to PTI, the NSE received SEBI’s final observation on September 4. The NSE submitted the draft paper of the proposed public issue to the market regulator in June.  The IPO, which will see light after nearly a decade of regulatory delays, will place NSE among India''s 10 most valuable companies by market capitalisation.

NSE, whose listing plan has been held up since 2016 by regulatory scrutiny and legacy legal issues, had filed its draft red herring prospectus with SEBI on June 17. This week the Supreme Court dismissed SEBI''s appeals in the long-running NSE co-location and dark-fibre cases - the governance disputes that had stalled the exchange''s listing ambitions for nearly a decade.

When IPO Will Hit Primary Market

The exchange is expected to announce the IPO price band and other key details next week. The public issue is likely to be launched on September 15, with the exchange targeting a listing on September 24-25, sources close to the development said. The listing is targeted before the Pitru Paksha period begins on September 26.

The Securities and Exchange Board of India (SEBI) issued an observation letter, effectively a clearance to the world''s largest derivatives exchange to proceed with the IPO, according to an update on the regulator''s website on Friday.

The NSE''s offering of 14.89 crore shares will compete alongside Jio Platforms Ltd, billionaire Mukesh Ambani-led conglomerate''s digital services arm, for the biggest-ever IPO tag. Jio''s offering is estimated to be about Rs 37,700 crore, but its timing has not yet been announced.

NSE IPO to beat Hyundai, LIC and Tata Capital 

The NSE IPO will surpass Hyundai Motor India''s Rs 27,858.75 crore listing in 2024 as well as LIC of India''s Rs 20,557.23 crore offering in 2022. It will also dwarf Paytm''s (One97 Communications) Rs 18,300 crore (2021), Tata Capital''s Rs 15,511.87 crore (2025) and Coal India''s Rs 15,200 crore (2010) listing. 

NSE dominates the country''s equity derivatives market and is the world''s busiest derivatives exchange by contracts traded, while also operating the benchmark Nifty 50 index.

NSE IPO Comprises Offer For Sale: Who is Selling Stakes? 

The proposed IPO will comprise an offer for sale by existing shareholders, allowing them to monetise their stakes without bringing fresh capital into the exchange.

The offering, structured entirely as an offer for sale of up to 14.89 crore shares - roughly 6 per cent of NSE''s paid-up capital - is expected to raise close to Rs 30,000 crore. Bankers tracking the deal expect shares to be priced around Rs 2,000 apiece, in line with where the stock has been trading in the pre-listing grey market, with a formal price band expected to be announced around September 11.

Because the issue is entirely an offer for sale, proceeds will flow to selling shareholders rather than to the exchange itself. NSE filed its draft prospectus with SEBI in June, though the approval timeline slipped after SBI Capital Markets was added to the list of selling shareholders, a change that triggered a fresh 21-day public feedback window on the revised documents.

According to the draft red herring prospectus (DRHP), State Bank of India will offload up to 2.48 crore shares in the IPO, while MS Strategic (Mauritius) Limited will sell 1.60 crore shares. Notably, Life Insurance Corporation of India (LIC), NSE''s single largest shareholder with a 10.72 per cent stake, will not sell any shares in the IPO.

Other key selling shareholders include Canada Pension Plan Investment Board, Aranda Investments (Mauritius) Pte Ltd, Bank of Baroda, Stock Holding Corporation of India Ltd, General Insurance Corporation of India, The New India Assurance Company, National Insurance Company and United India Insurance Company.

SBI currently holds a 3.23 per cent stake in NSE, while its subsidiary SBI Capital Markets owns another 4.33 per cent. Stock Holding Corporation of India has a 4.44 per cent stake in the exchange.

While the final issue size and valuation will be determined later, people familiar with the matter said the IPO could be around Rs 30,000 crore, implying a market capitalisation of more than Rs 5 lakh crore. NSE has around 1.8 lakh shareholders.

Disclaimer: This story is published from an agency feed (PTI), with changes in the intro, headlines and other paragraphs. 


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