NSE's Mega IPO Shrinks As SBI, Bank Of Baroda, Other Shareholders Trim Offer For Sale

The much-awaited initial public offering of the National Stock Exchange of India has shrunk in size after several existing shareholders trimmed the number of shares they plan to sell, according to the red herring prospectus (RHP) filed ahead of the issue, with the price band now expected to be announced on Friday, September 11.

The offer-for-sale component of the IPO has been revised down from the draft red herring prospectus filed in June, with major institutional shareholders including State Bank of India, Bank of Baroda and MS Strategic (Mauritius), an affiliate of Morgan Stanley, all reducing their proposed stake sales. State Bank of India cut its planned offer from 24.75 million shares to 15.97 million shares, while Bank of Baroda trimmed its sale from 10.99 million shares to 7.69 million shares. MS Strategic reduced its proposed sale from 16 million to 11 million shares.

Other Shareholders Follow Suit

The trend was echoed across several other selling shareholders. Stock Holding Corporation of India and General Insurance Corporation of India both reduced their proposed offers from roughly 10.9 million and 10.66 million shares respectively to around 6.19 million shares each, while National Insurance Company and Indian Bank also scaled back their planned sales. SBI Capital Markets, meanwhile, was added as a new selling shareholder in the revised filing, proposing to offload 8.78 million shares, while Amit Kumar Lohia, who had proposed a small share sale in the draft filing, no longer features among the sellers in the RHP.

Issue Size Now Seen Near Rs 23,000 Crore

Taken together, the changes mean existing shareholders are now expected to offer close to 5.5% of NSE's equity through the offer for sale, a reduction from roughly 6% envisaged at the draft stage. Based on an indicative price band in the range of Rs 1,700 to Rs 1,800 a share, market estimates suggest the offer-for-sale portion could now raise somewhere between Rs 22,500 crore and Rs 27,000 crore, down from an earlier estimate of around Rs 30,000 crore.

People familiar with the matter said the scaled-back sales reflect a view among some existing shareholders that retaining a larger portion of their holdings could allow them to participate in potential value appreciation once NSE lists, rather than exiting fully at the IPO stage.

What Comes Next

NSE is expected to officially announce its price band on September 11, with the issue slated to open for public subscription between September 16 and 18. The basis of allotment is expected around September 21, with listing targeted for September 23. The IPO is widely regarded as one of the most keenly watched listings in India's exchange history, given NSE's dominant position in the country's equity and derivatives markets, and its outcome is likely to be closely tracked by both retail and institutional investors as a bellwether for broader IPO market sentiment heading into the year-end listing season.

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