NSE IPO Anchor Demand Stronger Than Expected Ahead of ₹22,562 Crore Issue: Ashish Chauhan

Demand for the National Stock Exchange’s anchor book has turned out to be stronger than expected, even after the exchange cut the size of the institutional portion ahead of its much-awaited IPO.

NSE Managing Director and CEO Ashishkumar Chauhan said on Tuesday that the exchange was seeing more investor demand than shares available for allocation. The anchor book has been reduced to around ₹6,250 crore from the earlier ₹9,000 crore.

The strong appetite comes a day before the anchor book opens and two days before the IPO opens for public subscription on September 17. Chauhan said both foreign investors and domestic institutions are seeking shares, with allocations to be made across prescribed categories for mutual funds, other domestic investors and foreign portfolio investors.

The NSE IPO comprises an offer for sale of 12.64 crore shares in a price band of ₹1,700-₹1,785. At the upper end of the price band, the issue is worth around ₹22,562 crore, making it one of India’s largest IPOs. Since the issue is entirely an offer for sale, NSE itself will not receive any proceeds from the share sale.

The anchor demand comes as investors prepare to gain direct exposure to India’s largest stock exchange by trading volumes. The exchange is seeking a valuation of up to around ₹4.42 lakh crore through the IPO.

But ahead of the issue, Chauhan also flagged a more immediate challenge for NSE — trading activity. He said volumes have remained subdued over the last two to three years as Indian markets have largely moved sideways, while geopolitical tensions and global uncertainty have also kept investor risk appetite in check.

He expects a stronger market environment to translate into higher activity across transactions, indices and trading volumes. The exchange’s business remains closely linked to market participation and trading activity, making a revival in volumes an important growth driver.

Chauhan also said the introduction of merchant discount rates on UPI transactions above ₹2,000 could have some impact on transaction volumes through the payment channel initially. However, he expects the effect to stabilise over time.

NSE’s growth is increasingly spread across businesses beyond the traditional cash market. The exchange operates across equities, currencies, commodities, interest rates and electricity, and Chauhan said NSE currently has around 77% of the electricity futures market.

New products, including bond index futures, could add to that opportunity, although their launch remains subject to regulatory approval. On changes being considered by the Securities and Exchange Board of India for the cash market, Chauhan said NSE would work with whichever framework the regulator ultimately adopts.

The scale of NSE’s existing operations underlines the size of the platform coming to market. The exchange has around 13.2 crore unique investors and roughly 27 crore accounts. On a busy day, it can process around 2,200 crore orders and 30 crore trades.

Its current order-handling capacity stands at around 15 lakh orders per second, while further technology upgrades could take that capacity substantially higher.

For investors looking beyond the IPO subscription numbers, the bigger NSE story is therefore a combination of strong institutional appetite today and the exchange’s ability to grow trading activity as India's capital markets deepen. With the IPO opening on September 17, the anchor allocation will provide the first major indication of institutional demand for the issue.

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