Sebi clears NSE IPO document, set to become India's largest public offering
Quick Look
- Sebi approved NSE's IPO offer document, which could raise around Rs 30,000 crore and become India's largest IPO, surpassing Hyundai Motor India's 2024 offering.
- Existing shareholders plan to sell nearly 15 crore shares, with SBI group as the largest seller.
- The IPO follows Sebi's settlement of co-location and dark fibre cases from 2014-2015, which had delayed NSE's public listing plans for over a decade.
AI-generated summary
Why It Matters
NSE had planned to go public for over a decade but faced regulatory hurdles and court cases, particularly related to co-location and dark fibre allegations from 2014-2015 involving preferential treatment to brokers for illegal gains.
Issue likely to fetch Rs 30k-cr
MUMBAI: Markets regulator Sebi on Friday cleared National Stock Exchange (NSE)'s offer document to go public through the initial public offer (IPO) estimated to be worth about Rs 30,000 crore. This will make it the largest IPO in India, ahead of Hyundai Motor India's Rs 27,870 crore offer in Oct 2024. In the much-awaited NSE IPO, existing shareholders together are selling nearly 15 crore shares at a price band that would be announced before the opening of the offer. Market sources said the offer could be launched during the second half of the month. Currently, in the unofficial and unlisted space for trading of shares, mainly the IPO-bound ones, NSE shares are quoting between Rs 1,950 and Rs 2,050. If the IPO is priced at the lower end of this band, NSE, the largest bourse in India in terms of turnover and profit, would get a valuation of about Rs 4.8 lakh crore, translating to about $51 billion at the current exchange rate.
Current holders to sell 15cr shares
In the NSE IPO, the largest seller is SBI group. While it is selling nearly 1.6 crore shares, its arm SBI Capital Markets is offloading 87.8 lakh shares. Other large sellers in the offer are MS Strategic (Mauritius), which is selling 1.6 crore shares; Canada Pension Plan Investment Board, which is selling nearly 1.2 crore shares; Aranda Investments (Mauritius), which is selling a little over 1.1 crore shares; and Bank of Baroda, which is offloading about 1.1 crore shares, offer document showed. Among the domestic institutions that are also selling part of their stakes in the IPO are Stock Holding Corp, General Insurance Corp of India, New India Assurance, National Insurance, United India Insurance and Oriental Insurance. For over a decade, NSE had been planning to go public, but faced several regulatory hurdles and court cases. Among those was the one related to some cases of preferential treatment to a group of brokers to get derivatives trading data ahead of others which were used for illegal gains. Popularly known as co-location and dark fibre cases, these were perpetrated between 2014 and 2015, and Sebi in July agreed to settle those cases against a total payment of Rs 1,491 crore. This settlement, in turn, paved the way for NSE to move ahead with its IPO plans.
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What to Watch
AI outlook — possibilities, not facts
NSE IPO will be fully subscribed and likely oversubscribed
Likely · Within weeks
NSE's market valuation post-IPO will exceed Rs 5 lakh crore
Possible · Within months
Open Questions
- What will be the final price band for the NSE IPO?
- When exactly will the IPO open for subscription?
- How will the proceeds from the IPO be utilized by NSE?
- What impact will the large-scale stake sale by existing shareholders have on NSE's post-IPO shareholding pattern?
