The National Stock Exchange of India (NSE) has announced that its board has approved plans to launch its Initial Public Offering (IPO) through an offer for sale (OFS) by existing shareholders. The IPO plans gained momentum after the Securities and Exchange Board of India (SEBI) granted a no-objection certificate, ending a decade-long wait for the exchange's public issue.
The proposed IPO will involve listing equity shares of face value Re 1 on one or more recognized Indian stock exchanges, contingent upon regulatory approvals, prevailing market conditions, and other relevant factors. The exchange clarified that the IPO would be entirely an OFS, meaning that the company will not raise any fresh capital through the issue, and the proceeds will go to the selling shareholders. Around 4.5 percent of NSE's equity may be offered for sale. At a current price of around Rs 2,000 per share, the issue size could be approximately Rs 23,000 crore.
To ensure a smooth listing process, the NSE board has also approved the reconstitution of its IPO Committee. This committee will be responsible for overseeing activities delegated by the governing board, specifically for facilitating the IPO process. The committee is expected to serve as the central authority for the listing, defining listing procedures, and establishing criteria for appointing merchant bankers and legal advisors. These advisors will be crucial in drafting the Draft Red Herring Prospectus (DRHP).
The reconstituted IPO Committee will be chaired by Tablesh Pandey, a non-independent director. The committee members include public interest directors Srinivas Injeti, Mamata Biswal, Abhilasha Kumari, and G. Sivakumar, along with NSE Managing Director and CEO Ashishkumar Chauhan.
Sources suggest that the formal IPO process will commence soon, with the IPO committee guiding the way. Once the selection criteria are finalized, potential merchant bankers will be briefed, initiating the "beauty parade" pitch process. NSE is reportedly aiming to file the DRHP by the end of March or early April. The timeline depends on whether the September quarter's audited numbers are used, which could lead to a filing by March-end, or if the December quarter's numbers are used, potentially delaying the filing to April.
The NSE's IPO is anticipated to be one of the largest in India's capital markets, given the exchange's significant scale and dominance in the domestic equity derivatives market. According to analysts, NSE has approximately 1.77 lakh shareholders and is valued at over Rs 5 lakh crore in the grey market.
The listing is being widely regarded as a landmark event for India's capital market ecosystem, considering NSE's position as the country's largest stock exchange by volumes and its central role in the financial market infrastructure. The exchange also set up a five-member panel consisting of its board members that will facilitate the IPO process.
NSE's IPO plans were initially put on hold in 2016 due to regulatory concerns pertaining to governance lapses and a co-location case. However, a breakthrough occurred after SEBI granted in-principle approval to NSE's settlement application in the unfair market access case, which involved the exchange paying Rs 1,388 crore. Currently, LIC is the largest shareholder in NSE with a 10% stake, followed by the SBI group, which holds 7.6%.