NSE Files DRHP for $2-3 Billion IPO: Tiger Global and SBI to Exit

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

An Offer for Sale Led by Global and Domestic Giants

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

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

Valuation and Market Position

The timing of the filing follows the removal of a major regulatory overhang after SEBI issued a no-objection certificate, settling the long-standing co-location controversy that began in 2015. Based on current unlisted market prices ranging between Rs 1,950 and Rs 2,050 per share, the NSE is valued at approximately Rs 5 lakh crore.

Market analysts note that while the exchange's valuation appears high—trading near 45x FY26 earnings—it remains relatively attractive compared to its peers. For context, the BSE trades at approximately 70x earnings, while MCX commands a much higher multiple of around 80x. This valuation reflects NSE's status as a capital-light, near-monopoly operator in the Indian financial ecosystem.

Risks and Regulatory Tailwinds

Despite the optimistic outlook, industry experts warn of certain volatility risks. NSE’s earnings are heavily dependent on derivatives trading activity, a segment that has recently faced increased scrutiny. SEBI's recent interventions aimed at curbing excessive retail participation in the futures and options (F&O) segment could impact trading volumes and, consequently, the exchange's revenue streams.

However, the successful filing of the DRHP is expected to act as a massive catalyst for India's primary market. After a relatively muted start to the year, the NSE IPO is poised to be one of the most significant capital market events in recent history, offering investors direct exposure to the dominant player in India's equity and derivatives markets.

Key Takeaways