En route to D-Street: NSE files draft papers with Sebi

Mumbai: The National Stock Exchange (NSE) filed its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (Sebi), moving a step closer to an initial public offering (IPO) that has eluded it for over a decade amid a host of regulatory setbacks. Bankers and brokers said the IPO size will be around ₹30,000 crore, likely making it the largest public issue in India.

The record is held by Hyundai Motor India's ₹27,000 crore issue in 2024. The offer will comprise up to 148.9 million shares, representing nearly 6% of NSE's paid-up capital. NSE will be listed on the BSE as regulations prohibit a stock exchange from self-listing. The proposed issue is entirely an offer for sale (OFS) with a clutch of public sector and foreign institutions putting up a part of their stakes.

State Bank of India, MS Strategic (Mauritius), Canada Pension Plan Investment Board, Aranda Investments (Mauritius), Bank of Baroda, Stock Holding Corporation of India, General Insurance Corporation of India, The New India Assurance Company, National Insurance Company, and United India Insurance Company are among those that will be paring their holdings.

Prolonged Wait
Life Insurance Corporation of India, one of the largest shareholders, is not participating in the OFS. Up to 50% of the shares in the IPO will be allocated to qualified institutional buyers, not less than 15% will be for non-institutional bidders and 35% will be set aside for retail investors, according to the DRHP.

In the unlisted market, NSE is currently valued at around ₹5 lakh crore. On Wednesday, NSE shares in the unlisted market closed at ₹2,045 apiece. Over the past month, the stock has gone up by 3.28%.

The wait for the IPO has been one of India's most prolonged and closely watched, with the first application submitted to Sebi on October 18, 2016.

The regulator initially withheld approval due to concerns related to a co-location case, governance lapses at the bourse, and issues with its technology infrastructure. The NSE co-location case dates back to 2015, when a whistleblower alerted Sebi to possible manipulation in the exchange's trading system.

Since then, NSE has repeatedly approached Sebi for clearance. The regulator, under the current chairperson, formed an internal committee to look into the NSE IPO issue.

Subsequently, in June 2025, NSE filed two applications with Sebi to settle the long- standing co-location and dark fibre cases by offering to pay a total amount of more than Rs 1,388 crore.

Recently, a Sebi expert panel agreed to NSE's proposal to make a payment to settle cases that had been a key stumbling block in clearing the IPO.

A consortium of around 20 investment banks, including Kotak Mahindra Capital Company, JM Financial, Axis Capital, IIFL Capital Services, ICICI Securities, SBI Capital Markets, Avendus Capital, Morgan Stanley India Company, Citigroup Global Markets India and JP Morgan India will act as book-running lead managers (BRLMs) to the issue.