The much-anticipated NSE IPO is one step closer to its listing aspirations. The country’s largest stock exchange, the National Stock Exchange (NSE) has filed its DRHP with SEBI. The IPO is likely to be an ‘Offer For Sale’ with no fresh shares issued. As per the issue size and the valuation of the unlisted share, this could well be the largest IPO in India’s capital market history.
The IPO DRHP indicates that the issue comprises up to 14.89 crore equity shares. As per the share sale listed out, a total of 6.02% stake will be divested from the exchange’s equity. However, the price band of the issue is yet to be determined. We can make some assumptions on the valuation based on the unlisted market pricing.
NSE unlisted shares gain 6% in 6 months
NSE shares are currently trading around Rs 2,000 per share in the unlisted market. The share price has surged 6% in 6 months. Based on that, NSE’s valuation is close to Rs 5 lakh crore and market experts believe that the issue size could be in the vicinity of Rs 30,000 crore.
However, this is just an assumption, and the actual price band could be at a significant discount to the unlisted share price. As we had seen in the case of the NSDL and Tata Capital IPOs, the price band was at a significant discount to the unlisted market share. NSDL IPO price band was at nearly a 22% discount to the unlisted share price, while the Tata Capital IPO price band was at a whopping 50% discount to the unlisted share price.
6 largest IPOs in India’s primary market history
In terms of the IPO size, here is a look at the 6 largest IPOs thus far.
Hyundai India IPO in 2024 is the largest till date.The issue size was around Rs 27,000 crore. The price band for the IPO was set between Rs 1,865- 1,960 per share, and the issue was entirely a sale by existing Hyundai shareholders. However, the size and the valuation had drawn significant scrutiny by experts.
The Life Insurance Corporation of India or LIC IPO size was a tad over Rs 21,000 crore. The stock listed in 2022 and had offered specific discounts to retail investors.
The Rs 18,300 crore Paytm IPO was the third largest IPO so far. The issue was listed in 2021, and the big gap between the listing price and issue price continues to be one of the key reasons why the IPO is still talked about apart from its sheer size.
The Tata Capital IPO at Rs 15,511.87 crore ranks as the fourth largest. The issue was listed last year, and just like the NSE IPO, this was another much-anticipated issue, and the street was abuzz with expectation for months before the issue was launched. Interestingly, the Tata Capital price band was at over 50% discount to the share price in the unlisted market.
The Rs 15,000 crore Coal India IPO and the Rs 12,500 HDB Financial Services IPO are the other large issues that have been launched in India thus far.
Conclusion
All eyes are now on the next step in the NSE IPO process. The DRHP has been filed, and now the street will watch out for the regulator’s nod and the eventual timeline for the IPO to be launched.