The National Stock Exchange of India (NSE) has recently filed its updated draft red herring prospectus (UDRHP) with SEBI and other stock exchanges. This marks a significant development in the exchange's highly anticipated initial public offering (IPO), which has been in process for nearly a decade.
Key Changes in NSE's IPO Plan
Sources indicate that the revised issue size for the NSE IPO is now approximately Rs 23,000 crore. This figure represents a reduction from the initial estimate of around Rs 30,000 crore when the original DRHP was filed in June.
The IPO will continue to be structured entirely as an offer-for-sale (OFS), meaning existing shareholders will sell their shares, and the NSE itself will not receive any proceeds from the issue. The initial draft had proposed the sale of 14.89 crore shares, which constituted about 6 percent of the exchange's equity. However, the updated filing reflects a smaller overall offering, primarily due to certain shareholders opting to reduce their proposed stake sales.
Shareholders Reduce Stake Sale
Several public sector insurance companies, which were slated to participate in the IPO, have reportedly scaled back their planned share offerings. In the original draft, General Insurance Corporation of India Ltd had committed to selling up to 1.066 crore shares, while New India Assurance Ltd planned to offload 1.05 crore shares. National Insurance Company and United India Insurance Company had each proposed to sell 60 lakh shares. Collectively, these four insurers initially intended to sell approximately 3.37 crore NSE shares.
Additionally, MS Strategic (Mauritius) Ltd, an entity associated with Morgan Stanley, has also reduced the number of shares it plans to offer. The original prospectus had indicated MS Strategic would sell 1.60 crore shares.
Despite these reductions in the offer-for-sale, there remains strong investor interest in the proposed listing. Sources suggest that the institutional book has garnered interest totaling around Rs 85,000 crore, signaling robust demand from large-scale investors for the NSE's shares.
The updated filing is a key step in the NSE's long-awaited listing, nearly a decade after it first began the IPO process.
The filing of the UDRHP is a crucial step for the NSE as it moves closer to its long-anticipated public listing, a process that commenced almost ten years ago.