NSE IPO attracts fourfold interest; analysts provide investment recommendations

The National Stock Exchange of India (NSE) reported that its Initial Public Offering (IPO) attracted 'unexpectedly large' demand, significantly exceeding the number of shares available for distribution, stated Managing Director and CEO of NSE Ashishkumar Chauhan on Tuesday.

Chauhan did not disclose the ratio between Domestic Institutional Investors (DIIs) and Foreign Portfolio Investors (FPIs), noting that the allocation process is still ongoing. He also mentioned that the initially expected book size of around 9000 crore rupees was reduced to over 6000 crore rupees, despite sustained high demand.

'The demand is unexpectedly large,' emphasized Chauhan, adding that the offering interested a large number of investors wishing to acquire a limited number of shares.

The allocation will be made among various categories of institutional investors, including domestic mutual funds, other domestic institutions, and FPIs, in accordance with prevailing regulations. The NSE IPO is scheduled to begin subscription on September 17 and conclude on September 21. The price band is set at 1700–1785 rupees per share. The offering is a Follow-on Public Offer (OFS), wherein existing shareholders sell up to 12.64 crore shares; no new NSE shares are being issued.

Chauhan also noted that initially, some shareholders were reluctant to sell their stakes at the proposed valuation, which led to a reduction in the offer from the previously stated 6.2% to 5.11%. Furthermore, NSE had to approach some of its shareholders to participate in the OFS so that the exchange could meet listing requirements.

Listing the exchange will provide existing shareholders with a more transparent and liquid way to realize their assets. Currently, NSE shares trade in a private market, where shareholders may face increased transaction costs and counterparty risks, according to Chauhan.

According to the company's IPO prospectus, the shares will be listed on BSE. Regarding pricing, Chauhan clarified that the company's bankers consulted with investors both in India and abroad, including large institutions, mutual funds, pension funds, and retail investors. He explained that during discussions, it was decided to maintain the option for retail investors.

The proposed IPO comes as NSE remains India's largest stock exchange by turnover in several key segments. According to the IPO prospectus, as of June 30, 2026, NSE accounted for 93.05% of India's money market turnover and 68.48% of equity options turnover based on the premium turnover for the three months ending June 2026.

Chauhan also refuted the notion that NSE's operations heavily depend on weekly options. He stated that weekly options currently account for about 42% of NSE's total revenue, compared to 60–70% three to four years ago. The rest of the revenue comes from monthly index options, equity options, stocks, equity futures, colocation services, data, indices, and other business areas. The exchange has also expanded its activities into various asset classes, including equities, currencies, commodities, interest rates, and power.

NSE's integrated business model includes exchange listings, trading, clearing and settlement, indices, and market data. Chauhan explained part of the decrease in NSE's EBITDA margin last year due to a large one-time fine, noting that the exchange's normalized EBITDA margin remained in the range of 76–79% over the past five years.

As per the company's IPO prospectus, NSE's consolidated operating revenue grew by 9% year-on-year to 4560 crore rupees in the quarter ending June 2026, and net profit increased to 3121 crore rupees compared to 2811 crore rupees the previous year.

Chauhan stated that NSE's investor base has significantly expanded beyond major cities in the country, and the exchange will continue efforts to attract more investors and companies from regions such as Jammu and Kashmir, Northeast, Odisha, Jharkhand, and Chhattisgarh to the capital market. As of June 30, NSE had 13.237 crore unique registered investors and 26.136 crore registered investor accounts, with investors spread across over 99% of India's postal codes. 3005 organizations are registered on the exchange platform with a cumulative market capitalization of 474.08 trillion rupees.

Significant information has emerged regarding the Initial Public Offering (IPO) of the National Stock Exchange (NSE). According to sources, this IPO is expected to raise approximately 30,000 crore rupees and may commence on September 18th, with the stock listing scheduled for September 25th.

If the offering size reaches approximately 30,000 crore rupees, it could become the largest IPO in Indian history. However, official confirmation of these dates from the NSE has not yet been received, and the full IPO schedule has not been announced.

Sources suggest that the IPO price band might be announced on September 15th. Following this, the book-building process for anchor investors is expected to open on September 17th. Subsequently, the public subscription may open from September 18th to September 22nd, allowing investors to apply on September 18th, 21st, and 22nd.

The projected size of the NSE IPO is around 30,000 crore rupees. If this size is maintained, it will surpass the Hyundai Motor India IPO held in 2024, which raised 27,870 crore rupees, potentially making it the largest IPO in India. Due to this large volume, increased interest is anticipated from both domestic and foreign investors.

It is expected that the NSE IPO will be structured entirely as an Offer For Sale (OFS). This means the company itself will not issue new shares; instead, existing shareholders will sell a portion of their stake. Under the OFS, approximately 14.89 million equity shares with a face value of 1 rupee may be offered, constituting about 6% of NSE's paid-up capital.

Since the IPO will be conducted entirely through the OFS mechanism, no new shares will be issued, and the IPO proceeds will not go directly to the NSE. These funds will be received by the existing shareholders selling their stake. Reports also indicate that Bank of Baroda may sell its stake in the NSE IPO. The bank is expected to sell about 7.69 million NSE shares it holds under the OFS. According to reports, Bank of Baroda might realize about 35% of its stake in NSE, although the final number of shares and the stake will only be confirmed by official documents.

Considering the current probable timeline, the following dates may be significant for investors: September 15th—possible announcement of the price band; September 17th—possible opening of the book for anchor investors; September 18th, 21st, and 22nd—possible subscription dates; and September 25th—possible stock listing.

Nevertheless, investors should remember that all these dates are tentative. Final timelines will only become clear after the official schedule is published by the NSE. A clearer picture of the offer valuation, share volume, and the actual situation for investors can be seen after the price band and related IPO documents are released.

The Indian stock market is preparing for a significant surge in Initial Public Offerings (IPOs) this week. Between September 7 and 11, 12 companies are set to enter the market, planning to raise approximately 7,180 crore rupees from investors.

These IPOs are taking place at a time when major IPOs, such as NSE, are also anticipated later this month.

The total volume of these 12 IPOs amounts to approximately 7,179.84 crore rupees. Some companies will raise capital by issuing new shares, while others will allow existing investors to sell their stakes. Of the total issuance, about 2,814.10 crore rupees will be raised through fresh issues, and 4,365.74 crore rupees will come through an Offer For Sale (OFS).

The largest IPO this week is Rentomojo with a volume of 1,255.57 crore rupees, while the smallest will be Manika Plastic's offering at 125.50 crore rupees.

The companies entering the market this week represent various sectors. The IPO of Pranav Constructions will be available from September 7 to 9. Following that, the IPOs of Glas Wolf Systems, Prasol Chemicals, and Kanohar Electricals will open to investors from September 8 to 10.

From September 9 to 11, investors can participate in the IPOs of Karmatar Engineering, LCC Projects, Steamhouse, Manipal Payment and Identity Solutions, Asset Reconstruction, and Rentomojo. Additionally, Vigaland Developers' IPO will be open from September 10 to 15, and Manika Plastic's from September 11 to 16.

It is important to note that the Asset Reconstruction IPO is entirely based on OFS, meaning the company is not issuing new shares as part of this offering.

To participate in these IPOs, retail investors will need to invest an average of 14,500 to 15,000 rupees per lot. Karmatar Engineering's IPO requires the highest amount, around 14,986 rupees per lot, while a lot in Kanohar Electricals can be purchased for approximately 14,536 rupees.

The simultaneous appearance of so many IPOs provides investors with numerous options; however, due to limited capital, choosing between different offerings may prove difficult.

Despite the total IPO volume of 7,180 crore rupees this week, market attention is also focused on two potential mega-IPOs. According to reports, the proposed NSE IPO could be around 30,000 crore rupees and might appear in the week starting September 21. Furthermore, Jio Platforms has received SEBI approval, and its IPO could reach a volume of approximately 37,700 crore rupees.

If this size is maintained, it could surpass the Hyundai Motor India IPO of 27,859 crore rupees and become the largest IPO in the country. Thus, high activity is expected in the primary market over the next few months.

Good IPOs are often oversubscribed several times, after which allocation is done via lottery. In such a situation, applying for 1 lot from different demo accounts linked to family members (parents, spouses, siblings) using their separate PAN cards significantly increases the probability of receiving an allocation.