Summary of this article
NSE to meet on February 6, discuss IPO processes
NSE to form IPO committee to decide on IPO processes after Sebi gave go-ahead
National Stock Exchange (NSE) is set to begin its processes for the long-awaited initial public offering (IPO), after securing a nod from markets regulator Securities and Exchange Board of India (Sebi). The board of NSE is likely to discuss how to approach the public issue at a meeting scheduled on February 6, according to a report by Moneycontrol.
The board of the exchange is likely to form an IPO committee, which will largely comprise independent directors of the entity, while also reviewing the quarterly results for the period ending December. The committee will be the main body to decide on the listing processes, finalise the criteria regarding the appointment of merchant bankers and legal advisors for preparing the draft red herring prospectus (DRHP).
NSE is targeting to file the DRHP by March-end or by early April, according to the report. The filing could take place by March-end if the exchange uses audited quarterly results ending September, but if the documentation process takes longer, NSE might use December quarter results to file papers by early April.
Once the committee decides on the selection criteria, it will formally brief eligible merchant bankers for the pitch process. A large number of merchant bankers from domestic and foreign banks are likely to participate in the IPO process, the report said.
NSE IPO: Offer Size
The public issue of NSE will consist of offer for sale (OFS), where the exchange is likely to offer around 4.5 per cent of the stake. The issue size is expected to be around Rs. 23,000 crore, at the current price of Rs. 2,000 for a share. While NSE prefers the public issue to consist of OFS, it may consider raising a fresh issue of shares only if the target dilution is not met through existing shareholders, NSE MD & CEO Ashish Kumar Chauhan recently said.
The NSE's growing shareholder base may pose a significant operational problem for the issue. From over 5,000 in December 2023, 20,500 in December 2024, and nearly 1.84 lakh by December 2025, the exchange's shareholder count has increased significantly to approximately 1.91 lakh as of right now. To participate in the OFS, NSE will have to legally notify each shareholder and obtain their agreement, which might take a lot of time.
In 2016, NSE attempted to list for the first time, but as regulatory investigations into potential irregularities accelerated, the exchange was advised to abandon the scheme. The NSE and regulator SEBI were named as parties in the Delhi High Court, where the exchange's listing even made it.
