LIC won’t sell stake in NSE IPO OFS, betting on exchange's long-term potential

Life Insurance Corporation of India (LIC) will not be selling any part of its stake in the National Stock Exchange (NSE) as part of the exchange's initial public offering, choosing instead to hold on to one of the most valuable holdings in its portfolio as NSE moves towards a public listing.

LIC holds a 10.7% stake in NSE, translating into about 26.5 crore shares. The holding is significant enough that, despite NSE being an unlisted entity, it ranks among LIC's top six most valuable investments as of the March 2025 quarter.

The insurer's decision to stay out of the offer for sale suggests it is betting on further value creation in the exchange well beyond the listing itself, rather than using the IPO as an exit opportunity the way several private equity and venture capital investors in the offer are doing.


LIC's continued backing of NSE fits into a broader pattern for India's largest institutional investor, which has steadily built significant stakes across some of the country's biggest companies as part of its portfolio diversification strategy.

The insurer's exposure to NSE stands out precisely because it has been built in the unlisted space, a relatively unusual position for LIC, whose portfolio is typically dominated by listed blue-chip names.

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NSE itself has used its DRHP to lay out the scale of the operations LIC is staying invested in. The exchange said its operations are supported by proprietary technology infrastructure that is resilient and secure, supporting high-speed and high-frequency transactions while ensuring seamless market operations, comprehensive market data dissemination, and rapid implementation of regulatory directives.

The exchange has also positioned itself as having played a pivotal role in transforming India's capital markets by democratising access and enabling efficient capital flows through a transparent, technology-driven ecosystem.

That expansion shows up starkly in its investor base, which grew at a compounded annual rate of 26.9%, from 3.087 crore unique registered investors as of March 2020 to 12.91 crore as of March 2026. In FY2026 alone, the exchange facilitated total fund mobilisation of Rs 20.3 lakh crore through its platform, with investors now spread across more than 99% of India's postal codes as of March 2026.

That reach highlights why NSE commands a near-total share of trading volumes across India's two most actively traded asset classes, a position that has made it one of the most closely watched unlisted names on Dalal Street for years.

For an investor like LIC, analysts say holding on to a stake in a business with that kind of structural dominance, rather than booking gains at listing, points to a conviction that the bulk of the value creation from NSE's scale and market position is still ahead of it.

Analysts believe the NSE IPO could become one of the biggest capital market events in recent years and help revive investor interest in new listings, a dynamic that would only reinforce the case for long-term holders such as LIC to stay invested through the listing rather than around it.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)