The much-awaited mega IPO from the National Stock Exchange (NSE) is poised to unleash massive wealth for its current shareholders, with institutions, financial titans and market veterans set to pocket windfalls running into thousands of crores.
Since some investors bought NSE shares at a per-share valuation of less than Rs 1, they will see massive compounding on their investment, given its shares are now trading at around Rs 2,000 each in the unlisted market.
The country's largest stock exchange filed draft papers with market regulator SEBI on Wednesday for a gargantuan public offering pegged at roughly Rs 30,000 crore.
The IPO comprises the sale of 14.89 crore shares by existing shareholders, who will collectively divest nearly 6% of their stake in the exchange.
Among selling shareholders, State Bank of India (SBI) is expected to emerge as the largest beneficiary. The country's largest lender plans to offload 2.47 crore shares, potentially generating nearly Rs 4,950 crore based on current unlisted market prices.
SBI's weighted average acquisition cost stands at just 80 paise per share, suggesting the substantial appreciation the NSE has generated over the years.
MS Strategic (Mauritius), a Morgan Stanley fund, will make about Rs 2,934 crore, while Singapore's Temasek stands to make Rs 2,067 crore via its Aranda Investment arm, and Canada Pension Plan Investment Board will gain Rs 1,871 crore.
As per Reuters calculation, the top 10 investors offering shares are set for a windfall worth $2.6 billion, based on acquisition prices disclosed in the draft prospectus.
Based on the prevailing unlisted market price of around Rs 2,000 per share, billionaire investor and DMart founder Radhakishan Damani's 3.91 crore shares, representing a 1.58% stake in NSE, are valued at a whopping Rs 7,817 crore.
Hero Enterprise Chairman Sunil Kant Munjal's 1.02 crore shares, or a 0.41% stake, are worth around Rs 2,040 crore, while Infosys co-founder S Gopalakrishnan's 94.29 lakh shares, representing a 0.38% holding, are valued at nearly Rs 1,886 crore.
Individual investor Siddharth Balachandran's 0.38% stake is also estimated to be worth about Rs 1,863 crore at current unlisted market valuations.
State-owned Life Insurance Corporation of India (LIC) holds a 10.7% stake or 26.5 crore shares in the NSE, valuing its stake at around Rs 50,641 crore. LIC is not offloading its stake in the OFS.
Aranda Investments (Mauritius) and Stock Holding Corporation of India are the second and third-largest shareholders, with stakes valued at about Rs 21,469 crore and Rs 20,999 crore, respectively.
Among other players, SBI Capital Markets' holding is valued at around Rs 20,474 crore, Mahagony's stake at about Rs 17,619 crore, State Bank of India's holding at about Rs 15,243 crore, and PI Opportunities Fund's stake at around Rs 11,110 crore.
The NSE offer is being made through the book-building process, wherein not more than 50% of the net offer is allocated to qualified institutional buyers, and not less than 15% and 35% of the net offer is assigned to non-institutional bidders and retail bidders, respectively.
NSE, which has around 1.8 lakh shareholders, is valued at over Rs 5 lakh crore with its shares trading in the range of Rs 1,950-2,050 in the unlisted market, according to market participants. Upon listing, NSE is expected to become one of the most valuable listed financial institutions in India.
Vincent K A, Senior Research Analyst, Geojit Investments, said that NSE’s IPO is expected to attract strong investor interest, supported by its dominant market position, robust profitability, and direct exposure to the long-term growth of India’s capital markets.
“The recent moderation in financial performance—impacted by lower trading activity, particularly in derivatives amid regulatory changes, and elevated operating expenses from technology investments and one-off SEBI settlement charges—is likely to normalise over time.
The relative positioning in valuations compared to BSE can be influenced by the latter’s stronger recent growth trajectory, which may moderate over time,” added Vincent.
