NSE set to kick off IPO process after SEBI nod; board to approve financials, form IPO panel on Friday: Reports

The National Stock Exchange is preparing to formally begin its listing process, as per Moneycontrol exclusive. 
The board is scheduled to meet on Friday to consider the December quarter results. The meeting is also expected to approve the formation of an IPO committee comprising largely independent directors to oversee the process.

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IPO committee to steer the process

The proposed committee will finalise the framework for the IPO.

This includes:

• Selection criteria for merchant bankers
• Appointment of legal advisors
• Oversight of draft red herring prospectus preparation

After shortlisting, eligible bankers will be invited to present their proposals.
Both domestic and foreign bank-owned investment banks are expected to participate.

DRHP filing timeline

Sources indicate the exchange may target filing the draft red herring prospectus by March-end.
If documentation takes longer, filing could shift to early April.
Regulations allow filing with audited numbers that are not older than six months. This makes the September or December quarter financials suitable for submission.

Offer for sale likely

The issue is expected to be structured largely as an offer for sale.
Around 4.5% of the exchange’s equity may be offered.
At an estimated share price of ₹2,000, the issue size could be close to ₹23,000 crore.
The management has earlier indicated preference for an OFS route. A fresh issue may be considered only if the required dilution is not achieved through existing shareholders.

The exchange now has a significantly larger shareholder base. As per recent data, there are ~1.91 lakh shareholders.

All shareholders will need to be formally informed and given the option to participate in the OFS. This could extend timelines due to procedural requirements.

Regulatory clearances and settlements

The IPO move follows clearance from SEBI after resolution of legacy matters.

The exchange had filed settlement applications in the co-location and related cases and has agreed to pay around ₹1,400 crore as settlement.
It has already made provisions for these payments in its financial statements.

Background

NSE had first attempted to list in 2016 but withdrew the plan amid regulatory scrutiny.
With compliance issues addressed and regulatory clearance in place, the exchange is now moving ahead with a fresh attempt.

If timelines hold, the draft prospectus filing could mark the first formal step towards one of India’s most closely watched exchange listings.