NSE IPO Size May Shrink to ₹25,000-27,000 Crore as Some Shareholders Step Back

The National Stock Exchange’s much-awaited initial public offering could turn out smaller than originally planned, with some existing shareholders choosing to hold on to their stakes rather than sell them through the issue. 

Invest in Indian Markets and Unlock Future Potential With 5paisa!

Open Account Now

The offer for sale (OFS) is now likely to represent around 5.2-5.5% of NSE’s equity, compared with the 6% proposed earlier. That could bring the size of the IPO down to around ₹25,000-27,000 crore from the earlier estimate of ₹30,000 crore. 

At that level, NSE may narrowly miss the record for India’s largest IPO. Hyundai Motor India currently holds that position after raising ₹27,870 crore through its public issue. 

Why Could the NSE IPO Become Smaller? 

The change is being driven by some existing shareholders reconsidering their participation in the OFS. 

According to people familiar with the matter, some shareholders have decided against selling through the IPO as they believe their stakes could fetch a better valuation if sold at a later stage. 

NSE is also looking to make the issue more accessible to retail investors. Pricing is being structured with an eye on encouraging greater participation from smaller investors. 

The NSE IPO price band is expected to be between ₹1,700 and ₹1,785 per share. An earlier estimate had placed the price at around ₹2,000 per share. 

NSE IPO Likely to Open on September 18 

The IPO is likely to open for public subscription on September 18 and close on September 22. NSE shares are expected to list on September 25. 

The listing is being targeted before the beginning of the Pitru Paksha period on September 26. 

NSE’s offering could arrive around the same broader period as another large public issue being planned by Jio Platforms. The digital services arm of Mukesh Ambani-led Reliance Industries is estimated to be considering an offering of around ₹37,700 crore, although its timing has not yet been announced. 

SEBI Clearance Moves NSE Closer to Listing 

The latest developments follow SEBI’s clearance for NSE to proceed with its IPO last week, moving the exchange closer to a listing after a wait of nearly a decade. 

NSE had filed its draft prospectus with the regulator in June. The approval process subsequently took longer after SBI Capital Markets was added to the list of selling shareholders, triggering a fresh 21-day public feedback period on the revised documents. 

Under the draft papers, NSE had originally proposed an OFS of up to 148.9 million shares, equivalent to roughly 6% of its paid-up equity capital. 

There is no fresh issue of shares. This means NSE itself will not receive money from the IPO; the proceeds will go to the shareholders selling their stakes. 

SBI Among the Largest Selling Shareholders 

State Bank of India is among the biggest shareholders participating in the OFS and plans to sell up to 24.8 million shares. MS Strategic (Mauritius) Limited is proposing to offload another 16 million shares. 

The other selling shareholders listed in the draft papers include Canada Pension Plan Investment Board, Aranda Investments (Mauritius), Bank of Baroda, Stock Holding Corporation of India, General Insurance Corporation of India, The New India Assurance Company, National Insurance Company and United India Insurance Company. 

The final size of the IPO will now depend on how much equity existing shareholders ultimately decide to offer. If the stake sale settles at 5.2-5.5%, the issue could raise ₹25,000-27,000 crore still putting NSE among India’s biggest public offerings, even if it falls short of taking the top spot.