NSE gets Sebi green light to launch IPO; exchange eyes ₹30,000 crore issue

The National Stock Exchange (NSE) has secured the Securities and Exchange Board of India’s (Sebi) approval for its much-awaited initial public offering (IPO), paving the way for one of the largest public issues in Indian stock market history. The country’s largest stock exchange is looking to raise around ₹30,000 crore through the IPO, which could value NSE at more than ₹5 lakh crore.

According to an update on Sebi’s website, NSE received the regulator’s final observations on September 4. The exchange had filed its draft papers with Sebi in June for the proposed public issue.

If successful, the NSE IPO would surpass Hyundai Motor India’s ₹27,870-crore offering in October 2024 to become India’s largest public issue. However, that record could be short-lived, with Jio Platforms reportedly planning to raise around ₹37,700 crore through its IPO. Jio Platforms received Sebi’s approval for its proposed issue last week.

IPO likely to hit this month

Receiving Sebi’s observations is a key milestone in the IPO process and allows NSE to proceed with further preparations for the public issue, subject to applicable regulatory requirements. As per report, the exchange is aiming to launch its IPO later this month.

The proposed IPO will be entirely an offer for sale (OFS), with existing shareholders offering 14.89 crore equity shares. The offering represents nearly 6% of NSE’s equity, according to the draft red herring prospectus (DRHP) filed in June.

The OFS will see several prominent institutional investors pare their stakes in the exchange. While Life Insurance Corporation of India (LIC), one of NSE's largest shareholders, has opted not to participate in the IPO, several domestic financial institutions and global investors will monetise part of their holdings.

State Bank of India (SBI) is set to be the largest selling shareholder, offering up to 2.48 crore shares. It will be followed by Mauritius-based MS Strategic, which plans to offload around 1.6 crore shares, and Canada Pension Plan Investment Board (CPPIB), which will sell nearly 1.19 crore shares.

Among the other major shareholders participating in the OFS, Aranda Investments (Mauritius) will divest about 1.12 crore shares, while Bank of Baroda and Stock Holding Corporation of India will each sell around 1.1 crore shares. Public sector insurers are also reducing their holdings, with General Insurance Corporation of India (GIC Re) and New India Assurance each offering more than one crore shares. National Insurance Company and United India Insurance Company will each sell around 60 lakh shares as part of the offering.

According to the DRHP filed with Sebi, 50% of the net offer has been reserved for qualified institutional buyers (QIBs), 15% for non-institutional investors (NIIs), and the remaining 35% for retail investors. In addition, up to 5% of the post-offer paid-up equity share capital has been reserved for eligible employees.