NSE to Launch Country’s Largest IPO; LIC Will Not Sell Its Stake

After years of regulatory delays, the National Stock Exchange (NSE) has finally filed the Draft Red Herring Prospectus (DRHP) with SEBI for its Initial Public Offering (IPO). This is set to be the country’s largest IPO to date, with an estimated size of ₹30,000 crore.

The listing will be entirely an ‘Offer for Sale’ (OFS), wherein existing shareholders will offer to sell approximately 6 percent of their stake; no fresh capital will be raised through this issue.

According to trading platforms, the NSE has over two lakh investors, and its shares are currently trading at around ₹2,000 in the unlisted market. This pegs the exchange’s valuation at an estimated $57 billion (₹5,37,681 crore), making it the fifth most valuable exchange globally, trailing only the London Stock Exchange Group.

Merchant bankers believe the NSE might offer shares at a discount of 5–10 percent. Consequently, the IPO price could be around ₹1,900 per share.

Early Investors Set for Multi-fold Gains

Several large institutional investors had purchased NSE shares at very low prices. These early shareholders are expected to reap a massive profit of approximately $2.6 billion from the sale of their stakes.

SBI, one of the largest shareholders, holds 7.98 crore shares at a weighted average cost of ₹0.80 per share, while Bank of Baroda’s cost is a mere ₹0.54 per share. SBI is offering 2.47 crore shares, and Bank of Baroda is offering 1.089 crore shares. SBI stands to make a profit of nearly ₹47 billion from the sale of its NSE shares.

Morgan Stanley’s fund, MS Strategic, is set to earn ₹29.34 billion. Singapore’s Temasek, through its Aranda Investments arm, stands to make ₹20.67 billion, while the Canada Pension Plan Investment Board is set to gain ₹18.71 billion.

IDBI Bank will sell 7.4 million shares, and IFCI will sell 3.4 million shares; Bank of Baroda plans to sell approximately 1.1 million shares.

Listing details: To avoid a conflict of interest, NSE shares will be listed on the platform of its rival exchange, BSE. Twenty prominent book-running lead managers—including Kotak Mahindra Capital, HSBC, JPMorgan, Morgan Stanley, and HDFC Bank—have been appointed to handle the issue. The NSE will launch domestic and global roadshows over the next two months, and the mega IPO could hit the market for retail investors around Diwali.