The National Stock Exchange (NSE) has received approval from its governing board to undertake its Initial Public Offering (IPO) through an offer for sale (OFS) in a meeting held on Friday. This follows Securities and Exchange Board of India (Sebi) gave a no-objection certificate to the exchange received on January 30.
According to Bloomberg, The size of the IPO is expected to be around $2.5 billion (Rs 22,500 crore), with existing shareholders looking to sell between 4% and 4.5%.
Temasek Holdings, Life Insurance Corporation of India, State Bank of India and SBI Capital Markets are likely to be among the key sellers.
LIC held 10.7% stake in the exchange as of December end constituting 265 million shares. Stock Holding Corporation and SBI Capital Market held around 4% and SBI 3.23%.
Stake Sale Dynamics
Retail investors also held a significant 12.12% stake in anticipation of the IPO.
Its current market capitalisation in the unlisted market is Rs 5.26 lakh crore in the unlisted market. The Securities and Exchange Board of India has eased the minimum initial public offering float for large companies with valuations of over Rs 5 lakh crore after listing to sell just 2.5% of their paid-up capital.
Strategic Diversification
The board also approved the reconstitution of the IPO Committee which has Tablesh Pandey – Chairperson (Non-Independent Director), Srinivas Injeti – Member (Public Interest Director), Mamata Biswal – Member (Public Interest Director), Abhilasha Kumari – Member (Public Interest Director), G. Sivakumar – Member (Public Interest Director), and Ashishkumar Chauhan – Member (Managing Director & CEO).
In addition, the board also approved the incorporation of a wholly owned subsidiary to set up a coal exchange. The proposed subsidiary may be named National Coal Exchange / Bharat Coal Exchange / India Coal Exchange, as approved by the Ministry of Corporate Affairs. NSE has approved capital infusion of up to Rs 100 crore in the proposed coal exchange subsidiary.
In 2016, the exchange had filed its first draft red herring prospectus in which it had filed for an offer for sale of 111.41 million shares. However, the market regulator has asked it to withdraw due to the ongoing co-location and other probes. Earlier, in the day the National Company Law Appellate Tribunal (NCLAT) dismissed an appeal challenging a Competition Commission of India (CCI) order closing allegations of abuse of dominance against the exchange in relation to its co-location services.