Dozens of shareholders in the National Stock Exchange (NSE) are set to realize substantial profits from an upcoming Offer-for-Sale (OFS), despite a generally subdued broader market. The nation's largest lender, State Bank of India, is leading a group of 22 shareholders in divesting approximately $2.36 billion worth of shares.
The shares are being offered at a trimmed price range of Rs 1,700-1,785 per unit, which values the NSE at an impressive $46 billion in market capitalization. This three-day OFS is scheduled to open for subscription on September 17, marking a highly anticipated step towards the exchange's eventual public listing on Indian equity markets.
Who's Selling Their NSE Stake?
Beyond State Bank of India, several other prominent entities are participating in the share sale. These include government-controlled insurers such as GIC, New India Assurance (NIACL), National Insurance, and United India Insurance. Additionally, foreign investment funds like Aranda Investments and the Canadian Pension Plan, alongside Bank of Baroda and Stock Holding Corporation, are reducing their holdings in the NSE through this OFS.
Many of these founding shareholders stand to gain immensely. Over the past two decades, bonuses, stock splits, and rights issues have driven the average purchase price for some early investors down to as low as 32 paise per share. With 212,562 shareholders as of mid-June, the NSE is currently the largest unlisted company in India, and nearly all are expected to see multi-bagger returns.
NSE's Market Position and Profitability
Established by the government in 1993, the fully automated NSE quickly rose to prominence, challenging the dominance of the privately held BSE. Today, it is the undisputed leader in India's traded volumes across derivatives, cash, commodities, and debt markets. The exchange's robust performance, fueled by a booming economy, rising stock prices, and increased market penetration, has made its unlisted shares highly sought after by both institutional investors and individual traders.
Despite the current OFS unfolding against a backdrop of global economic concerns—including rising Brent crude prices, elevated bond yields, and geopolitical tensions—analysts widely anticipate a successful subscription. The NSE itself is a debt-free and exceptionally profitable company, boasting world-class margins (51% PAT, 66.8% EBITDA, and 33% RoE) that rank in the top quartile globally. It is known for generating significant cash flow and maintaining one of the best dividend payout ratios worldwide.
Key Holders Not Selling
Interestingly, some of NSE's largest individual and institutional shareholders are not participating in the current OFS. Billionaire Radhakishan Damani, who holds a 1.58 percent stake, is among those opting to retain their shares, betting on further upside post-listing. Similarly, the Life Insurance Corporation of India (LIC), the NSE's largest holder with a 10.72 percent stake, has chosen not to trim its position and may even increase its holding by participating as a buyer.