NSE Invites Investment Banks to Pitch for Managing IPO
In a significant development, the National Stock Exchange (NSE) is taking steps toward its Initial Public Offering (IPO) by inviting 15 investment banks to submit their proposals for managing this milestone.
Key Details of the NSE IPO
– Valuation: The NSE is currently valued at ₹5 lakh crore in the unlisted market.
– Potential Fundraising: Based on these market valuations, the IPO is anticipated to raise approximately ₹23,000 crore.
– Investment Banks in the Running: Notable banks competing for the mandate include:
– JPMorgan Chase
– Kotak Mahindra Capital Company
– JM Financial
– Axis Capital
– ICICI Securities
Timeline and Support
– Pitching Process: The selection process is expected to kick off by mid-March.
– Draft Filing: The NSE plans to file its draft red herring prospectus in April.
– Assistance: Rothschild has been enlisted to aid the NSE in appointing lead bankers, legal advisors, and other intermediaries for the IPO.
Shareholder Dynamics
The IPO will be an offer for sale, indicating that existing shareholders may dilute their stakes without the NSE raising new funds. Preliminary estimates suggest that existing investors could offload around 4-4.5% of the total equity.
Major Shareholders
– Life Insurance Corporation of India (LIC): Largest investor with a 10.72% holding.
– Other Significant Stakeholders:
– Aranda Investments Mauritius Pte: 4.54%
– Stock Holding Corporation of India Ltd: 4.44%
– SBI Capital Markets Ltd: 4.33%
– Veracity Investments Ltd: 3.93%
The exact identities of the shareholders planning to offer shares in the IPO remain unclear.
Recent Developments
– NSE shares were priced at ₹2,035 in the unlisted market as of Thursday.
– Last month, the Securities and Exchange Board of India (Sebi) issued a long-awaited no-objection certificate for the IPO, resolving a regulatory standstill that had impeded the listing for nearly a decade.
Organizational Structure
Earlier in February, the NSE’s board approved the IPO and established a six-member committee to oversee the process. This committee is led by Tablesh Pandey, including notable public interest directors and NSE’s Managing Director and CEO, Ashishkumar Chauhan.
Conclusion
The NSE’s invitation to investment banks marks a pivotal step towards its IPO. With a substantial valuation and a strategic plan in place, the exchange is poised to enter a new phase of growth while providing existing shareholders an opportunity to realize returns on their investments. As the process unfolds, market participants will be keenly interested in how these developments will shape the financial landscape in India.