India's National Stock Exchange (NSE) is gearing up for one of the country's largest-ever initial public offerings (IPOs), with a target price band of ₹1,700 to ₹1,785 per share. Regulatory approval for the IPO was secured on Friday, September 4, and the book-building process is expected to kick off on September 11. The listing on the stock exchange is anticipated to occur in the week of September 21, potentially by September 25. This IPO could see NSE valued at approximately $47 billion to $55 billion, potentially placing it among India's top 10 companies by market capitalization.
The IPO will be entirely an Offer for Sale (OFS), meaning existing shareholders will sell their stakes rather than the company issuing new shares. Around 6% of the company's equity is expected to be diluted, aiming to raise up to ₹30,000 crore. Public sector entities such as State Bank of India, Bank of Baroda, and Life Insurance Corporation (LIC), along with private equity firms like Morgan Stanley and Temasek, are among the selling shareholders. LIC currently holds a 10.7% stake in NSE.
Market experts have provided varied perspectives on the pricing. While some media reports initially suggested a price range of ₹1,800-₹2,100, experts like Arun Kejriwal of Kejriwal Research and Investment Services suggest the upper price band should not exceed ₹1,750. This is based on unlisted market prices of ₹2,050 for NSE shares on September 7 and a grey market premium (GMP) of around ₹300, ensuring a reasonable upside for primary market investors. A price above ₹1,750 could make the offering appear highly valued, potentially deterring some investors. Conversely, an IPO price below ₹1,700 could be considered attractive, according to Zee Business Managing Editor Anil Singhvi.
The lock-in period for pre-IPO investors began on September 8, meaning those who did not sell their shares before this date will have to wait six months to do so. The final valuation and investor response will be crucial, as a lower issue price would offer a more appealing entry point. The IPO's success and subsequent listing performance are also expected to influence shares of competitors like BSE, which might face some short-term pressure as investors gain another listed equity exchange option.
