NSE files for IPO: exchange behind 93% of India’s cash market to go public

The National Stock Exchange of India has filed its draft red herring prospectus with SEBI, bringing the country’s most-awaited market listing a step closer after nearly a decade of delays.

The proposed initial public offering is expected to be a pure offer-for-sale of about ₹30,000 crore, large enough to overtake Hyundai Motor India’s 2024 listing as the biggest IPO in India’s history.

The filing comes just as Reliance Jio Infocomm is reportedly preparing to file draft papers within days for a roughly $4 billion IPO, potentially before Reliance Industries chairman Mukesh Ambani’s annual shareholder address on June 19.

For NSE, which first attempted a listing in 2016 before the co-location scandal derailed the process, the filing marks a major governance and capital-market milestone.

NSE IPO: A decade-long wait finally ends

The IPO will comprise an offer-for-sale of up to 148.9 million shares, or nearly 6% of NSE’s paid-up equity.

There will be no fresh issue of shares, meaning the exchange will not receive any proceeds from the listing. The money raised will go entirely to existing shareholders who are selling part of their stakes.

The structure is important as NSE does not need capital in the conventional sense.

It is already one of India’s most profitable market infrastructure institutions, with deep cash generation, a debt-free profile and a dominant franchise across trading, clearing, data and index services.

The filing follows SEBI’s no-objection certificate in January and the NSE board’s approval in February for an IPO through the OFS route.

That sequence helped clear a process that had been stuck for years after regulatory scrutiny linked to the co-location case.

NSE shares are proposed to be listed only on BSE, as an exchange cannot list on its own platform.

Market participants expect the listing process to conclude before the end of 2026, subject to regulatory approvals and market conditions.

In the unlisted market, NSE has been valued close to ₹5 lakh crore, or more than $58 billion.

That valuation would place it among India’s most valuable listed companies once it makes its public debut.

Who is cashing out

State Bank of India is expected to be the largest seller, offering about 2.48 crore shares.

Other major selling shareholders include Canada Pension Plan Investment Board, Temasek-linked Aranda Investments, Bank of Baroda, General Insurance Corporation of India, The New India Assurance Company, National Insurance Company and United India Insurance Company.

Several long-time investors are using the IPO to monetise holdings accumulated at a fraction of the current implied value.

That gives the issue a strong “value unlocking” angle for public-sector banks and insurers, many of which have held NSE shares for years.

Not every marquee shareholder is heading for the exit.

LIC, Premji Invest and Radhakishan Damani are not among the proposed sellers, signalling that some influential investors prefer to stay invested through the listing cycle.

The appeal is easy to understand as NSE remains India’s dominant trading venue, with about 93% share in the cash market, near-total control of equity futures and a commanding share of equity options.

What the Street is saying

Sarvam Goel, founder of Pocketful, told Business Today that NSE’s listing could immediately place it among India’s 10 most valuable listed companies.

He also cautioned that unlisted-market optimism is already reflected in the current price.

Goel said large IPOs usually come at a 15-20% discount to unlisted levels to leave room for listing gains and wider participation.

On that basis, he said a price closer to ₹1,600 a share could offer investors a more balanced entry point.

A SharesNservices valuation report argued that NSE’s profitability metrics stand ahead of global peers such as CME, ICE, Nasdaq and LSEG.

The report pegged NSE’s PAT margin at 62.9% and EBITDA margin at 76.5%, while highlighting its zero-debt balance sheet and FY27 listing catalyst.

The same report said NSE offered a stronger risk-reward profile than BSE if priced fairly, even though BSE has enjoyed faster growth in derivatives from a smaller base.