SEBI clears NSE's offer-for-sale IPO of 14.89 crore shares

The Securities and Exchange Board of India issued its observation letter on the National Stock Exchange IPO on Friday, 4 September. That letter is the regulator's clearance to proceed. NSE had filed draft papers on 17 June.

The issue is an offer for sale of up to 14.89 crore shares, about 6 percent of paid-up equity. NSE will not receive the proceeds. Market estimates put the size near Rs 30,000 crore and the unlisted valuation near Rs 5 lakh crore, or about $55 billion. Those figures will move with the price band. People familiar with the timetable told Reuters the book-build could start around 11 September, the band around 15 September, and listing in the week of 21 September, with some desks aiming for 24 or 25 September.

If the issue prints near the top of those estimates it would pass Hyundai Motor India's Rs 27,870 crore sale in October 2024, still the record public issue. SEBI last week also cleared observations for Jio Platforms' potential Rs 35,000 crore IPO, so two large listings now sit on the same calendar.

Who is selling

The draft lists State Bank of India as the largest seller, up to 2.48 crore shares, then MS Strategic (Mauritius) Limited at 1.60 crore. Other names on the block include SBI Capital Markets, the Canada Pension Plan Investment Board, Bank of Baroda, Stock Holding Corporation of India, General Insurance Corporation, New India Assurance, National Insurance, United India Insurance, and affiliates of Morgan Stanley and Temasek.

On Thursday, before the letter posted, unlisted NSE stock traded between Rs 1,945 and Rs 2,045 a share. After the news, brokers said there were no sellers at the counter. Vijay Gada of KuberGrow Financials put that freeze down to holders waiting for the band.

A decade of delay

NSE first filed IPO papers in 2016. The listing then sat behind inquiries into co-location and dark-fibre access, which alleged that some brokers received faster server links than others. The Supreme Court recently dismissed SEBI's appeals in those cases, which market desks treated as the last large legal obstacle. The exchange remains the world's largest derivatives venue by contracts and leads BSE on cash-market share, revenue and liquidity.

One open question is whether SEBI will let NSE's own shares trade on NSE through the "permitted-to-trade" route. The other is valuation. A 6 percent float on a Rs 5 lakh crore name is thin. The selling banks and insurers will set the band against that scarcity and against the Jio calendar. The observation letter does not fix a price. It only says the draft can move to an updated prospectus.

For public holders the fact that matters is simpler. India's largest exchange is about to have a public ticker after ten years of private marks, and the cash from that ticker will go to the institutions that already own it, not to the exchange's own books.