The National Stock Exchange of India (NSE) has scaled back its ambitious initial public offering (IPO), with the issue size now projected to be between $2.37 billion and $2.71 billion (₹21,500-₹22,600 crore), down from an earlier estimate of nearly $3.6 billion (₹30,000 crore). This reduction follows concerns from global investors regarding the exchange's future growth potential, especially after regulators imposed curbs on its booming derivatives business, which was a significant growth engine. The NSE's IPO is structured as an offer-for-sale (OFS) by existing shareholders, meaning no new capital will be raised by the exchange itself.
Several major shareholders have trimmed their proposed stake sales, contributing to the smaller IPO size. For instance, State Bank of India (SBI), the largest selling shareholder, cut its sale from 2.475 crore shares to 1.597 crore shares. Other significant reductions include MS Strategic (Mauritius) from 1.60 crore to 1.10 crore shares, Bank of Baroda from 1.099 crore to 76.9 lakh shares, and General Insurance Corporation of India from 1.066 crore to 61.9 lakh shares. These shareholders are reassessing their valuations in light of a lower-than-expected price band, with some shares trading above ₹2,000 in the unlisted market compared to the IPO's indicative range of ₹1,700-₹1,785 per share.
The revised offer represents approximately 5.1-5.2% of NSE's equity, a decrease from the initial plan of 6%. The total number of shares offered in the IPO has been cut to around 12.4 crore from the originally proposed 14.89 crore. The updated draft red herring prospectus (UDRHP) is expected to be filed with SEBI, with the price band likely to be announced soon. This downsizing positions NSE's IPO to trail other significant offerings, such as Reliance Jio's expected $3.8 billion public offering and Hyundai Motor India's $3.3 billion issue in 2024.
