By Dilip Davda
The wait is finally over. NSE has received final confirmation for its IPO, which opens on September 17 and closes on September 21, with listing likely around September 24. The size, however, has been trimmed by roughly Rs 10,000-11,000 crore from earlier estimates.
The company is offering equity shares in a price band of Rs 1,700 to Rs 1,785 per share of Re 1 face value, and at the upper end, it’s expected to mobilise around Rs 22,570 crore.
Fully priced, but an incomparable business
As with any big issue, the market is divided. Some believe NSE is priced richly enough that it may not perform the way people are expecting, that it could get an average response and list somewhere close to the issue price, neither a big pop nor a discount.
My own view, having gone through the numbers, is that the issue is indeed fully priced, no argument there. But the counterbalance is the sheer stature of the business: NSE is an incomparable world leader in derivatives trading and now carries the status of India’s premier exchange, alongside BSE, the country’s oldest.
One detail worth flagging for anyone confused about where NSE will actually list: the company has not sought permission to list its own shares on its own platform, and SEBI has not permitted it either. NSE will list on BSE only.
This is almost a mirror image of what happened when BSE itself came public, it wasn’t allowed to list on its own platform and was compulsorily listed on NSE instead. Now the roles have reversed.
The man behind both listings
There’s a genuinely remarkable thread running through this IPO: Ashishkumar Chauhan. He is the same person who, as MD & CEO of BSE, floated that exchange’s IPO back in 2017. Since then, BSE has rewarded its investors handsomely, issuing two bonus issues along the way, and the stock today trades around Rs 4,000, up from an offer price of roughly Rs 800 at the time of listing.
Chauhan later moved on to head NSE, and now, at the helm there, he is bringing NSE’s own IPO to market. That makes him instrumental in taking not one but two of India’s premier stock exchanges public, a genuinely unique distinction in Indian capital markets history.
Just as BSE rewarded its investors handsomely under his stewardship, I expect NSE to do the same for those willing to stay the course.
What to expect on listing, and after
My honest expectation is that NSE performs well post-listing, though there could be some profit-booking pressure on day one that dents sentiment briefly. That’s fairly typical for large, high-profile listings.
But for anyone who buys in, whether through the IPO application and allotment route or by picking it up from the secondary market after listing, and holds the stock for at least about two years, I’d expect a good reward. This is very much a name for patient investors rather than those chasing a quick listing pop.
I’m keeping my fingers crossed on both the subscription numbers and the listing performance here, because how NSE performs will matter well beyond this one issue. It’s likely to set the tone and sentiment for the next mega IPO already on the horizon, Reliance Jio, which is reportedly planning to float its issue in the first week of October at a size of Rs 30,000 crore plus.
If that materialises as expected, it would become the largest IPO in Indian history. Roadshows are said to be starting as early as next week, with the company reportedly aiming to wrap up the IPO process before Navratri and the Diwali season begins.
For now, all eyes are on NSE. For Ahishkumar Chauhan it adds another feather in the cap and a successful exchange listing to his name. For long term investors, it will be a good feather in the portfolio.
