NSE’s shareholders retain significant stake after OFS

A majority of the existing shareholders of the National Stock Exchange of India (NSE) have retained a significant portion of their holdings even after tendering shares in the offer-for-sale (OFS) component of the exchange’s Rs 22,569-crore initial public offering (IPO).

The selling shareholders largely comprised institutional investors, who collectively held a 36.82 per cent stake in NSE before the IPO and tendered shares representing a 5.11 per cent stake in the exchange, according to an analysis of data.

Of the 20 institutional shareholders that participated in the OFS, nine were foreign institutional investors, which collectively held a 15.96 per cent stake before the IPO, it added.

The remaining 11 were domestic institutions, comprising 10 public sector entities and ICICI Lombard General Insurance, which together held a 20.86 per cent stake before the OFS.

Several large institutional shareholders have largely stayed put despite participating in the OFS.

Aranda Investments, which held a 4.54 per cent stake before the OFS, Stock Holding Corporation of India with a 4.44 per cent stake, SBI Capital Markets with 4.33 per cent and Chrys Capital with 3.73 per cent have reduced their holdings by an average of only around 7 per cent.

Among other large foreign investors, Crown Capital offered around 11 per cent of its pre-OFS holding, while TA Asia Pacific reduced its holding by about 6 per cent.

The pattern indicates that the OFS has allowed existing investors to partially monetise their investments while continuing to hold substantial stakes in NSE.

The IPO, which was fully subscribed on the second day of bidding on Friday, is India’s second-largest public issue after Hyundai Motor India’s Rs 27,870-crore IPO in 2024. It has also surpassed the Rs 21,000-crore public offer of Life Insurance Corporation of India in 2022. The issue has drawn strong investor interest, with non-institutional investors and qualified institutional buyers driving subscription on the second day of bidding.

The IPO comprises an OFS of up to 12.64 crore equity shares by existing shareholders. The exchange has fixed a price band of Rs 1,700-1,785 per share, valuing NSE at up to Rs 4.42 lakh crore at the upper end of the price band.

Since the issue is entirely an OFS, the proceeds from the share sale will accrue to existing shareholders and not to NSE. The size of the OFS was earlier planned at 14.9 crore shares, but was subsequently reduced to 12.64 crore shares, bringing down the overall issue size from the initial estimate of around Rs 30,000 crore.

The IPO will close on September 21, while NSE shares are expected to make their market debut on September 24.