NSE IPO Price Band to Be Announced on Friday as Issue Size Shrinks to Around Rs 23,000 Crore; Issue Size Seen at ₹23,000 Crore

The National Stock Exchange (NSE) is expected to announce the price band for its much-awaited initial public offering on Friday, September 11, CNBC-TV18 reported on Thursday, citing sources. The development comes a day after the exchange filed its updated draft red herring prospectus (UDRHP) with the Securities and Exchange Board of India (SEBI) and the stock exchanges.

The filing takes NSE another step closer to its long-awaited public listing. The size of the proposed IPO, however, is expected to be lower than previously envisaged.

The NSE IPO could raise around ₹23,000 crore, compared with the roughly ₹30,000 crore issue size previously expected. The reduction follows some existing shareholders cutting the number of shares they plan to sell.

The issue will remain entirely an offer for sale (OFS), meaning NSE will not receive any fresh capital from the IPO. Instead, proceeds will go to shareholders selling their holdings.

The original draft prospectus proposed an OFS of up to 14.89 crore shares, representing around 6% of NSE's paid-up equity capital. The smaller issue could also mean that NSE misses the opportunity to become India's largest-ever IPO. Hyundai Motor India's ₹27,870-crore issue in 2024 currently holds that record.

NSE IPO price band likely at ₹1,700-₹1,785

NSE is likely to price its shares between ₹1,700 and ₹1,785 apiece, Bloomberg reported, citing people familiar with the matter. The expected range is below the earlier marketed range of ₹2,000-₹2,100 per share.

CNBC-TV18 had also reported that the exchange was considering a lower price band, with its report putting the likely range at ₹1,750-₹1,785 per share. The final price band is expected to be announced on September 11.

Bloomberg further reported that NSE may reduce the stake offered through the IPO to around 5.5%, from the 6% proposed earlier. At ₹1,785 per share, a 5.5% stake sale would value the exchange at around ₹4.42 lakh crore, compared with the earlier targeted valuation of up to ₹5.26 lakh crore.

Existing shareholders cut NSE stake sale

The proposed reduction in the IPO size is linked to changes in the number of shares some existing investors intend to sell.

According to Moneycontrol, General Insurance Corporation of India (GIC Re) had originally proposed selling up to 1.066 crore NSE shares, while New India Assurance had planned to sell 1.05 crore shares. National Insurance Company and United India Insurance Company had each proposed selling 60 lakh shares.

Together, the four public-sector insurers had initially proposed selling around 3.37 crore NSE shares. Some of these shareholders have since reduced their planned stake sales, Moneycontrol reported.

MS Strategic (Mauritius) Ltd, an entity linked to Morgan Stanley, has also reduced the number of shares it intends to sell, according to the report. The original prospectus had proposed a sale of 1.60 crore shares by the entity.

Reuters, in a report published on September 10, also reported that several shareholders had reduced their planned sales, including National Insurance Company, GIC, Stock Holding Corporation and Morgan Stanley-linked MS Strategic. Reuters said the proposed offer could now represent around 5.2% of NSE's equity, compared with 6% earlier.

The differences in the reported stake percentage reflect ongoing changes to the proposed offer, with other reports putting the revised stake at around 5.3%-5.5%. The final number will be clear once NSE formally announces the issue details.

NSE IPO may fall short of India's biggest issue

At the reported price range and reduced stake, the NSE IPO is unlikely to surpass Hyundai Motor India's ₹27,870-crore issue. A 5.5% stake sale at the upper end of ₹1,785 could raise around ₹24,300 crore as cited by bloomberg

Reuters similarly reported that the issue could raise up to around ₹22,600 crore based on the revised offer structure. The final issue size, price band and number of shares offered will determine the eventual size of NSE's IPO.

The selling shareholders named in the IPO documents include Morgan Stanley-linked MS Strategic, Temasek Holdings, State Bank of India, Stock Holding Corporation of India, GIC Re, New India Assurance and National Insurance Company, among others.

NSE is expected to announce the final price band and offer details shortly, bringing the exchange closer to a listing that has been in the works for several years.

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