Shares of IFCI Ltd fell more than 4% on Wednesday after reports suggested that the National Stock Exchange could price its initial public offering below earlier indications and reduce the stake offered in the issue.
At 9:27 am, IFCI shares were trading 4.01% lower at Rs 88.90 on the NSE, compared with their previous close of Rs 92.61. The stock opened at Rs 92.50, touched a high of Rs 93.56 and slipped to an intraday low of Rs 88.31.
The stock underperformed the broader market, with the Nifty 50 trading about 0.5% lower during the same period.
NSE is likely to price its IPO between Rs 1,700 and Rs 1,785 per share, below the Rs 2,000-Rs 2,100 range previously marketed, according to reports.
At the upper end of the proposed band, the exchange would be valued at around Rs 4.4 lakh crore, or $46.4 billion, Bloomberg reported.
The exchange may also reduce the stake offered to about 5.5% of its equity capital from the previously planned 6%. NSE’s draft offer document had proposed an offer for sale of up to 14.89 crore shares.
The lower-than-expected price range and potential reduction in the offer size weighed on IFCI because of its indirect exposure to NSE. IFCI owns more than 50% of Stock Holding Corporation of India , which, in turn, holds over 4% of the exchange.
As a result, developments affecting NSE’s valuation have a bearing on the value investors assign to IFCI’s indirect holding. NSE did not immediately respond to a Reuters request for comment on the reported price band.
The long-awaited IPO could still rank among India’s biggest public issues. NSE, which dominates the country’s equity derivatives market, is reportedly targeting a listing in the week beginning September 21.
Despite Wednesday’s decline, IFCI shares remained up 20.22% over the past month, outperforming the Nifty 500, which fell 2.95% during the same period. The stock was also up around 68% year-to-date.