NSE IPO: Why India's Top Superstar Investors are Refusing to Sell

As the National Stock Exchange (NSE) prepares for what is set to be India's largest-ever initial public offering, a fascinating divide has emerged among its shareholders. While major institutions are lining up to book massive profits, a group of India's most legendary investors has decided to hold onto their stakes.

The Great Divide: Profit-Takers vs. Long-Term Believers

The upcoming NSE IPO is structured entirely as an Offer for Sale (OFS) involving approximately 148.9 million shares, representing nearly 6% of the exchange's paid-up capital. This ₹30,000 crore issue is creating a massive windfall for several long-term holders. For instance, State Bank of India (SBI) is selling 2.47 crore shares, eyeing a staggering 256,775% profit on its original investment. Similarly, public insurers like New India Assurance and National Insurance are looking at returns of up to 6,422 times their initial outlay.

However, a "superstar" list of individual investors is taking the opposite approach. Rather than monetizing their holdings, they are opting to remain long-term shareholders in the exchange.

The Heavyweights Holding On

Leading the list of holdouts is Radhakishan Damani, the retail tycoon behind DMart. Damani holds roughly 3.9 crore shares (a 1.58% stake), valued at approximately ₹8,032 crore based on the last unlisted market trade of ₹2,055 per share. His refusal to sell is accompanied by other high-profile names:

  • Sunil Kant Munjal (Hero Group): Holding 1.02 crore shares worth around ₹2,040 crore.
  • S. Gopalakrishnan (Infosys Co-founder): Holding 94.29 lakh shares worth roughly ₹1,886 crore.
  • Ignatius Navil Noronha (DMart CEO): Holding 30 lakh shares valued at ₹600 crore.
  • Dolly Khanna: The smallcap expert holds 15.16 lakh shares worth about ₹311 crore.
  • Raamdeo Agrawal & Motilal Oswal: Both veteran value investors are sitting out with holdings worth roughly ₹164 crore each.

Even the largest shareholder, Life Insurance Corporation of India (LIC), which holds an 11% stake, is not participating in the offer for sale, signaling immense institutional confidence in the exchange's future.

Valuation and Market Dynamics

At an indicative price of ₹2,000 per share, the NSE IPO would value the exchange at approximately ₹5 lakh crore ($52 billion). Interestingly, despite its market dominance, at this valuation, NSE would actually trade at a cheaper multiple than its rival, BSE. While NSE would carry a price-to-earnings (P/E) ratio of 49, BSE currently trades at a P/E ratio of over 66.

The IPO structure is designed to be highly inclusive, with 35% of the issue reserved for retail investors, 15% for non-institutional bidders, and 50% for qualified institutional buyers (QIBs).

Key Takeaways

  • Massive Profit Realization: Institutions like SBI and public insurers are poised to exit with multi-thousand-fold returns on their original investments.
  • High-Profile Confidence: Legendary investors including Radhakishan Damani and LIC are choosing not to sell, signaling long-term bullishness on the exchange's growth.
  • Historic Scale: The ₹30,000 crore IPO is set to become India's largest-ever listing, surpassing the ₹27,000 crore record set by Hyundai Motor India.