NSE Files DRHP for $2 Billion IPO: Tiger Global and SBI to Exit Stakes

The National Stock Exchange (NSE) has officially restarted its long-awaited journey toward a public listing by filing its Draft Red Herring Prospectus (DRHP) with SEBI. This move marks a massive comeback for India’s largest exchange, nearly nine years after its initial listing attempt was derailed by regulatory hurdles.

An Offer for Sale Led by Major Global and Domestic Players

The proposed IPO is structured entirely as an Offer for Sale (OFS), meaning the exchange itself will not receive any fresh capital; instead, existing shareholders will be divesting their holdings. The DRHP proposes the sale of up to 14.89 crore shares with a face value of Re 1 each.

Global investment giant Tiger Global has emerged as the most significant seller, proposing to offload 1.48 crore shares, which constitutes over 13% of the total offer. Other major international participants include Aranda Investments (Mauritius) and SAIF II-SE Investments. On the domestic front, prominent institutional players like IDBI Bank, State Bank of India (SBI), and SBI Capital Markets are slated to reduce their stakes, alongside HDFC Standard Life, Bajaj Holdings & Investment, and Bank of Baroda.

Valuation and Market Positioning

The NSE’s return to the primary market comes at a time of significant valuation. Based on recent unlisted market prices ranging between Rs 1,950 and Rs 2,050 per share, the exchange is valued at approximately Rs 5 lakh crore. This valuation would position it among India's most valuable listed financial institutions.

Market analysts note that while the exchange's valuation is premium, it remains competitive compared to its peers. Trading at roughly 45x FY26 earnings, NSE is priced lower than the Bombay Stock Exchange (BSE), which trades near 70x, and MCX, which sits at around 80x. Analysts describe NSE as a "capital-light near-monopoly," a position that offers investors direct exposure to India's dominant market operator.

Overcoming Regulatory Hurdles and Future Volatility

The path to this IPO has been fraught with challenges, primarily stemming from the 2015 co-location controversy. That incident, involving allegations of preferential access to market data for certain algorithmic traders, led to years of investigations and governance reforms. However, with SEBI issuing a no-objection certificate earlier this year, the primary regulatory overhang has finally been removed.

Despite the optimism, experts urge caution regarding future earnings. NSE's revenue remains heavily dependent on derivatives trading, a segment that is highly sensitive to regulatory shifts. Recent SEBI curbs aimed at limiting retail participation in the futures and options (F&O) segment have already begun to influence trading volumes. As the exchange moves toward its listing, investors will be closely watching how these regulatory changes impact its long-term profitability.

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