The National Stock Exchange has formally restarted its long-delayed journey to the stock market, filing draft papers with Sebi for an estimated $2-billion initial public offering nearly nine years after its first listing attempt was derailed by the co-location controversy, according to an ET report.
IPO Structure and Major Sellers
The draft red herring prospectus proposes an offer for sale of up to 14.89 crore shares with a face value of Re 1 each. Since the issue is entirely an OFS, NSE will not receive any proceeds from the IPO, with existing shareholders selling part of their holdings instead.
Tiger Global has emerged as the largest shareholder participating in the issue, proposing to sell 1.48 crore shares, accounting for over 13% of the total offer size. Aranda Investments (Mauritius) and SAIF II-SE Investments are among the other major investors reducing stakes.
Among domestic institutions, IDBI Bank plans to sell 74.15 lakh shares, SBI will sell 64.28 lakh shares, and SBI Capital Markets will offload 53.62 lakh shares. IFCI will sell 34.31 lakh shares, while HDFC Standard Life, Bajaj Holdings & Investment, and Bank of Baroda are also participating in the share sale.
| Seller | Shares Offered | % of Total Offer (approx.) |
|---|---|---|
| Tiger Global | 1.48 crore | >13% |
| IDBI Bank | 74.15 lakh | ~5% |
| SBI | 64.28 lakh | ~4.3% |
| SBI Capital Markets | 53.62 lakh | ~3.6% |
| IFCI | 34.31 lakh | ~2.3% |
| Others (Aranda, SAIF II, HDFC Standard Life, Bajaj Holdings, Bank of Baroda) | Remaining | Balance |
Background and Regulatory Clearance
The filing marks a major milestone for the exchange, whose original Rs 10,000-crore IPO proposal filed in 2016 was put on hold amid regulatory investigations into allegations of preferential access provided to certain algorithmic traders through its co-location facility.
The co-location controversy dates back to 2015, when certain brokers were accused of receiving market data milliseconds ahead of rivals through preferential access to NSE servers. The matter led to years of investigations, governance reforms, and management changes at the exchange.
Momentum for the listing picked up earlier this year after Sebi issued a no-objection certificate, removing the final major regulatory hurdle. NSE subsequently appointed 20 merchant bankers and completed preparations for the issue following the announcement of its annual financial results.
Valuation and Analyst Views
Based on current unlisted market prices of Rs 1,950–2,050 per share, NSE is valued at around Rs 5 lakh crore, a level that would place it among the country's most valuable listed financial institutions.
Nitant Darekar, research analyst at Bonanza, commented, as quoted by ET: "NSE remains a capital-light near-monopoly. At around Rs 1,950–2,170 in the unlisted market, it trades near 45x FY26 earnings. That's rich, but below BSE at around 70x and MCX at around 80x."
He said the settlement of the long-running co-location case had removed a significant overhang that had clouded the exchange's listing prospects for years. However, Darekar cautioned that the exchange's earnings remain closely linked to derivatives trading activity, which can be volatile, especially after regulatory changes in the futures and options segment. Recent curbs by Sebi on retail participation in the futures and options market have affected trading volumes and weighed on exchange revenues.
Market Implications
Market participants expect the IPO to be among the largest capital market events in recent years and a potential catalyst for India's primary market, which has seen a relatively muted start to the year. The listing would also provide investors with direct exposure to India's dominant exchange operator, which commands a near-monopoly in key trading segments and remains one of the most closely tracked names in the unlisted market.
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