National Stock Exchange of India Reportedly Trims IPO Price, Size

The National Stock Exchange of India (NSE) is likely to reduce the price and size of its long-awaited initial public offering, a move that would lower its overall valuation and could keep it from becoming the country's largest-ever listing. The exchange is now reportedly targeting a price range of ₹1,700 to ₹1,785 per share, according to a Bloomberg News report on Wednesday that cited people familiar with the matter.

Revised Offering Details

The newly proposed price band is significantly below the ₹2,000 to ₹2,100 range previously marketed to investors. In conjunction with the price cut, the NSE may also reduce the total stake being sold to approximately 5.5% from the originally planned 6%.

This reduction is reportedly due to some existing shareholders deciding against selling their stakes at the lower price point. Bloomberg's sources noted that deliberations are ongoing and that the final terms, including price, size, and timing, could still change.

Market Impact and Valuation

At the top end of the revised range, a 5.5% stake sale would raise approximately ₹243 billion ($2.6 billion). This would place the deal below the ₹279 billion raised by Hyundai Motor India in 2024, which currently stands as India's largest IPO.

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The offering would give the NSE, the world's largest derivatives exchange by trading volume, a maximum valuation of ₹4.42 trillion ($46.6 billion). This represents a substantial decrease from the earlier targeted valuation of up to ₹5.26 trillion. The adjustment reflects investor concerns about the Indian primary market's capacity to absorb several large-scale offerings concurrently, including the anticipated IPO of Jio Platforms Ltd.

Background and Timeline

The NSE's IPO consists entirely of secondary shares, meaning the exchange itself will not receive any proceeds. The funds will go to the selling shareholders, which include:

• Morgan Stanley
• Temasek
• State Bank of India
• Stock Holding Corporation of India
• Several state-owned insurance companies

India's market regulator approved the exchange's draft prospectus on September 4, clearing a major hurdle for the listing. According to the report, the NSE is expected to announce the final price range this week, with the offering opening for subscription in the week beginning September 14.