NSE Submits DRHP for $2-3 Billion IPO, Featuring Major Stakeholders Tiger Global and SBI
The National Stock Exchange (NSE) has officially resumed its long-awaited initial public offering (IPO) process, filing draft papers with the Securities and Exchange Board of India (Sebi) for an estimated $2-3 billion. This move comes nearly nine years after its initial listing attempt was halted due to the co-location controversy. The draft red herring prospectus (DRHP) outlines an offer for sale of up to 14.89 crore shares, with a face value of Re 1 each.
The IPO will be entirely an offer for sale (OFS), meaning the NSE will not receive any proceeds from the listing. Instead, existing shareholders will sell portions of their holdings. Tiger Global is the largest shareholder participating in the offering, proposing to sell 1.48 crore shares, which represents over 13% of the total offer size. Other significant investors, including Aranda Investments (Mauritius) and SAIF II-SE Investments, will also reduce their stakes.
Domestic institutions are also involved in the share sale. IDBI Bank plans to sell 74.15 lakh shares, while State Bank of India (SBI) intends to offload 64.28 lakh shares. SBI Capital Markets will sell 53.62 lakh shares, and IFCI will offload 34.31 lakh shares. HDFC Standard Life, Bajaj Holdings & Investment, and Bank of Baroda are also participating in the offering.
The filing represents a significant milestone for the NSE, which had its original Rs 10,000-crore IPO proposal from 2016 stalled due to regulatory investigations into allegations of preferential access for certain algorithmic traders. Earlier this year, momentum for the listing increased after Sebi issued a no-objection certificate, clearing the last major regulatory hurdle. Following this, the NSE appointed 20 merchant bankers and completed preparations for the IPO after announcing its annual financial results.
Current unlisted market prices for NSE shares range between Rs 1,950 and Rs 2,050, valuing the exchange at approximately Rs 5 lakh crore. This valuation positions NSE among India’s most valuable listed financial institutions. Nitant Darekar, a research analyst at Bonanza, noted that while NSE trades at around 45 times FY26 earnings, it remains below the valuations of the Bombay Stock Exchange and Multi Commodity Exchange.
The co-location controversy, which dates back to 2015, involved allegations that certain brokers received market data milliseconds ahead of others through preferential access to NSE servers. This issue led to extensive investigations and governance reforms at the exchange. Darekar pointed out that the resolution of the co-location case has alleviated a significant concern regarding the exchange’s listing prospects. However, he cautioned that NSE’s earnings are closely tied to derivatives trading activity, which can be volatile, particularly following recent regulatory changes in the futures and options segment.
Recent restrictions by Sebi on retail participation in the futures and options market have impacted trading volumes and affected exchange revenues. Market participants view the upcoming IPO as one of the largest capital market events in recent years, potentially revitalizing India’s primary market, which has had a subdued start this year. The listing will also offer investors direct exposure to India’s leading exchange operator, which holds a near-monopoly in key trading segments.
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