NSE IPO price band likely at ₹1,700–₹1,785 per share; issue size seen at ₹26,500 crore: Sources

The National Stock Exchange (NSE) is likely to set the price band for its proposed initial public offering (IPO) at ₹1,700-₹1,785 per share, according to industry sources.

At the upper end of the proposed price band, NSE would command a valuation of around ₹4.5 lakh crore, below the nearly ₹5 lakh crore valuation estimated earlier. The lower pricing is aimed at making the issue more attractive to retail investors, a source told Fortune India.

The exchange is also likely to trim the stake offered in the IPO to around 5.5%, from the earlier plan of nearly 6%, as some shareholders are understood to have decided against selling at the proposed valuation.

At the upper price of ₹1,785, a 5.5% stake sale could fetch existing shareholders around ₹26,500 crore.

NSE is expected to submit an updated draft red herring prospectus (DRHP) to the Securities and Exchange Board of India (Sebi) today. The final price band is likely to be announced subsequently, according to sources.

NSE IPO likely to hit market next week

Industry sources said the exchange could announce the price band next week, with the IPO likely to open for subscription around September 18. NSE is targeting a stock-market listing by September 25, although the timetable could change depending on regulatory clearances and the final issue schedule.

The revised issue structure marks a potential change from the plan outlined in NSE’s DRHP filed with Sebi in June. The document had proposed an offer for sale (OFS) of 14.89 crore shares, representing nearly 6% of the exchange’s equity. Since the issue is entirely an OFS, NSE itself will not receive any of the IPO proceeds.

SBI, BoB, global investors among key sellers

A clutch of prominent institutional shareholders is expected to participate in the OFS. Life Insurance Corporation of India (LIC), one of NSE’s largest shareholders, has decided not to sell shares in the IPO.

State Bank of India (SBI) is expected to be the largest selling shareholder, with up to 2.48 crore shares on offer. Mauritius-based MS Strategic is set to sell around 1.6 crore shares, while Canada Pension Plan Investment Board (CPPIB) could offload nearly 1.19 crore shares.

Aranda Investments (Mauritius) is expected to sell about 1.12 crore shares. Bank of Baroda and Stock Holding Corporation of India are each likely to offer around 1.1 crore shares.

Public-sector insurers are also part of the OFS. General Insurance Corporation of India (GIC Re) and New India Assurance are each expected to sell more than one crore shares, while National Insurance Company and United India Insurance Company could offer around 60 lakh shares each.

Under the allocation framework outlined in the DRHP, qualified institutional buyers (QIBs) will receive 50% of the net offer, non-institutional investors (NIIs) 15%, and retail investors the remaining 35%.

NSE IPO GMP loses steam

The grey market premium (GMP) for NSE shares has moderated amid reports of a smaller issue size and lower pricing.

The GMP stood at ₹255 as of September 9, compared with ₹245 on September 8 and ₹285 on September 7. It was ₹200 on September 4.

The moderation suggests that grey-market expectations are adjusting to the possibility of a lower valuation and a reduced stake sale, even as investor interest in NSE’s highly anticipated IPO remains strong. However, grey market premiums are unofficial and can change sharply before listing.

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