NSE IPO Likely To Be Rs 23,000 Crore OFS, DRHP Filing Nears, Says Report

National Stock Exchange of India prepares for IPO via Offer for Sale, targeting Rs 23000 crore, with DRHP filing expected by March or April. NSE IPO Update: After securing a go-ahead from market regulator Securities and Exchange Board of India, the National Stock Exchange of India is set to kick-start its long-awaited initial public offering (IPO) process, according to a Moneycontrol report citing sources. As per the Moneycontrol report, the NSE board is likely to take up the IPO proposal at a meeting scheduled for Friday. The board is also expected to review the exchange’s December quarter results during the meeting. IPO Committee Likely To Be Constituted According to the Moneycontrol report, the NSE board is expected to constitute a dedicated IPO committee, largely comprising independent directors. The committee will spearhead the listing process and will first finalise the criteria for appointing merchant bankers and legal advisors to prepare the draft red herring prospectus (DRHP). Once the selection framework is approved, eligible merchant bankers will be formally briefed, triggering the pitch process, commonly referred to as the ‘beauty parade’. The Moneycontrol report noted that several domestic and foreign bank-owned merchant bankers are expected to participate. DRHP Filing Timeline Being Finalised People familiar with the matter told Moneycontrol that NSE is targeting the filing of the DRHP by end-March or early April. If the exchange uses September quarter audited numbers, the filing could happen by March-end. However, if the documentation process extends, the DRHP may be filed in April using December quarter audited financials. Regulations allow companies to file the DRHP with financial statements that are not older than six months, the Moneycontrol report added. OFS Size And Shareholding Challenge According to the Moneycontrol report, the IPO will be structured as an Offer for Sale (OFS), with around 4.5 percent of NSE’s equity likely to be offered. At an estimated unlisted market price of about Rs 2,000 per share, the issue size could be close to Rs 23,000 crore. NSE MD and CEO Ashish Kumar Chauhan has previously stated, as cited in the Moneycontrol report, that the exchange prefers an OFS route and would consider a fresh issue only if the desired dilution cannot be achieved through existing shareholders. A key operational challenge highlighted in the Moneycontrol report is NSE’s sharply expanding shareholder base, which has grown to about 1.91 lakh shareholders. NSE will need to formally communicate with all shareholders and seek consent for participation in the OFS, a process that could impact timelines.