National Stock Exchange of India Ltd (NSE) on 28th Dec 2016 filed its draft red herring prospectus (DRHP) with market regulator Securities and Exchange Board of India (Sebi) which is expected to be an ambitiously large initial public offering (IPO). It will be the biggest IPO in past six years. The share sale is believed to be India’s second-biggest Initial Public offering (IPO). The NSE IPO could raise around Rs10,000 crore, as reported through sources, making it the largest public listing since Coal India Ltd.’s which raised around Rs15,200 crore in its IPO in October 2010.
According to, draft red herring prospectus (DRHP), available on the website of Securities and Exchange Board of India (Sebi) as wells as investment banks managing the IPO, existing shareholders of NSE are diluting a 23% stake in the exchange through an offer for sale.
The book running lead managers to the issue are Morgan Stanley India Co. Pvt. Ltd, HDFC Bank Ltd, ICICI Securities Ltd, IDFC Bank Ltd, Citigroup Global Markets India Pvt. Ltd, JM Financial Institutional Securities Ltd, Kotak Mahindra Capital Co. Ltd and IIFL Holdings Ltd.
American investor Tiger Global Management is looking to sell its entire 3% stake in the exchange, according to DRHP. Other significant shareholders that will be selling stakes in the IPO include Aranda Investments, SAIF Partners, Norwest Venture Partners, Citigroup Strategic Holdings, IDBI Bank Ltd, Goldman Sachs, State Bank of India Ltd and SBI Capital Markets Ltd. Twenty-seven investors are expected to be selling their shares through the (Initial Public Offering) IPO.
Shareholders such as Stock Holding Corporation of India Ltd (4.4%), Life Insurance Corporation of India (12.5% stake) and Veracity Investments (5%), an investment division of Private equity fund ChrysCapital, will not be selling shares in the IPO.
For the financial year 2015-2016, the exchange announced turnover of Rs2,359.1 crore compared, with turnover of Rs2,291 crore the previous financial year 2014-15. Data from the DRHP shows, in 2015-16, the exchange gained a profit of Rs985.3 crore, down from a profit of Rs991.7 crore the previous financial year 2014-15.
The Initial public offering (IPO) comes at a time when the exchange is hunting for a new managing director and chief executive officer after the sudden exit of the Ex-MD, Ms. Chitra Ramakrishnan.
J. Ravichandran, president of finance and legal group as well as the company secretary at NSE, is the acting CEO and managing director of the country’s largest stock exchange by volume.
Ramkrishna’s tenure would have ended in 2018. She was appointed NSE head in April 2013 for a period of five years, replacing then chief Ravi Narain.
As Per the sources on 6th December 2016, NSE board had set up a search panel which included Mahindra group, Anand Mahindra, chairman and Usha Thorat, ex-deputy governor of Reserve Bank of India, to find a new managing director and CEO.
Other members of the search panel are NSE board members Dinesh Kanabar, former deputy CEO of KPMG in India T.V., Mohandas Pai, former chief financial officer of Infosys Ltd, and the CEO of Dhruva Advisors LLP. Kanabar and Pai are public interest directors at NSE.
NSE Fellow Counterpart BSE Limited is also going public with its Initial public offering (IPO). BSE filed its DRHP in September 2016.
In March 2016, Enrich Advisors Pvt Ltd has reported that BSE had received an In-Principal go ahead by SEBI for its Initial public offering
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Existing shareholders of Bombay stock exchange, Asia’s oldest stock exchange, intend to sell 29.96 million shares through the offer-for-sale route, according to its prospectus. The issue represents 27.43% of BSE’s pre-share sale capital.
The issue size is estimated to be Rs1,200-1,300 crore. BSE’s draft document listed 262 shareholders who have agreed to sell their shares. Singapore Exchange Ltd (SGX) will sell 5.09 million shares, or a 4.7% stake, making a complete exit from BSE.
In 2016, Twenty-seven companies have raised Rs27,000 crore through the IPO route, which is a six-year high for fund-raising through initial share sales.