India's market regulator posted an observation letter during the week ended Sept. 4, effectively giving NSE permission to proceed toward a listing, according to its website on Friday. The world's largest derivatives exchange filed its draft paperwork on June 18. The plan involves only secondary shares, and up to 148.9 million of them would be sold, amounting to about 6% of the company.
State Bank of India Ltd., General Insurance Corp. of India Ltd., and Canada Pension Plan Investment Board are among the shareholders planning to sell. People familiar with the matter say the IPO could collect up to 300 billion rupees, or $3.2 billion. Reaching that number would set a new high for Indian debuts, topping Hyundai Motor India Ltd.'s 278.7 billion-rupee listing.
A marquee sale would also give India's equity capital market a lift after a slower first half, when weaker stock performance nudged would-be issuers to wait for better pricing. IPOs in India have raised about $9.4 billion so far this year, trailing each of the previous two years when proceeds exceeded $20 billion.
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This clearance caps a listing effort that has stretched across years. NSE first sought an IPO in 2016, but the process was knocked back by regulatory scrutiny tied to alleged corporate-governance issues and concerns over unequal access to its trading systems. In 2019, regulators barred the exchange from accessing the capital markets for six months and ordered it to give up part of its profits following claims that certain brokers benefited by situating servers close to equipment inside the co-location facility. To handle the IPO, NSE named 20 banks, among them Kotak Mahindra Capital Co., JM Financial Ltd., Morgan Stanley, HSBC Holdings Plc, Citigroup Inc., and JPMorgan Chase & Co.
If this lands, a headline NSE float would likely pull fresh attention and money into Indian equities while adding coveted supply. With year-to-date IPO proceeds at about $9.4 billion and still behind the last two years when each topped $20 billion, a deal of this size could be a swing factor. Keep an eye on how it prices, how much sells, and who shows up on day one.
