NSE files draft IPO papers, investors to divest 22.5% stake
The NSE IPO is expected to be the country’s second-biggest public offer as the share sale is likely to raise around Rs10,000 crore
Mumbai: National Stock Exchange of India Ltd (NSE) on Wednesday filed its initial public offering (IPO) prospectus with market regulator Securities and Exchange Board of India (Sebi). The share sale is expected to be India’s second-biggest IPO.
According to the so-called draft red herring prospectus (DRHP), available on the website of the investment banks managing the IPO, existing shareholders of NSE are diluting a 22.5% stake in the exchange through an offer for sale.
On 6 December, Mint had reported that investors of the exchange were looking to sell up to a 23% stake through the proposed IPO. The NSE IPO could raise around Rs10,000 crore, Mint reported, making it the largest public listing since Coal India Ltd’s Rs15,200 crore IPO in October 2010.
NSE has appointed Citigroup Global Markets India Pvt. Ltd, JM Financial Institutional Securities Ltd, Kotak Mahindra Capital Co. Ltd, Morgan Stanley India Co. Pvt. Ltd, HDFC Bank Ltd, ICICI Securities Ltd, IDFC Bank Ltd and IIFL Holdings Ltd to manage its share sale.
American investor Tiger Global Management is looking to sell its entire 3% stake in the exchange, according to the DRHP. Other significant shareholders that will be selling stakes in the IPO include Aranda Investments, SAIF Partners, Norwest Venture Partners, Citigroup Strategic Holdings, IDBI Bank Ltd, Goldman Sachs, State Bank of India Ltd and SBI Capital Markets Ltd.
A total of 27 investors will be selling their shares through the IPO.
Shareholders such as Life Insurance Corp. of India (12.5% stake), Stock Holding Corp. of India Ltd (4.4%) and Veracity Investments (5%), an investment arm of PE fund ChrysCapital, will not be selling shares in the IPO.
For the financial year 2015-16, the exchange posted revenue of Rs2,359.1 crore compared, with revenue of Rs2,291 crore the previous year, data from the DRHP shows. In 2015-16, the exchange had a profit of Rs985.3 crore, down from a profit of Rs991.7 crore the previous year.
The IPO comes at a time when the exchange is hunting for a new managing director and chief executive officer.
On 2 December, Mint reported that Chitra Ramkrishna had resigned as managing director and chief executive officer (CEO) of NSE.
J. Ravichandran, who serves as group president (finance and legal) and company secretary at NSE, was named interim managing director and CEO of the country’s largest stock exchange by volume.
Ramkrishna’s tenure would have ended in 2018. She was appointed NSE head in April 2013 for a period of five years, replacing then chief Ravi Narain.
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On 6 December, Mint reported that the NSE board had set up a search panel that included Anand Mahindra, chairman, Mahindra group, and Usha Thorat, ex-deputy governor of Reserve Bank of India, to identify a new managing director and CEO.
Other members of the search panel are NSE board members T.V. Mohandas Pai, former chief financial officer of Infosys Ltd, and Dinesh Kanabar, former deputy CEO of KPMG in India and CEO of Dhruva Advisors LLP. Pai and Kanabar are public interest directors at NSE.
NSE rival BSE Ltd is also going public. BSE filed its DRHP in September.
Existing shareholders of BSE, Asia’s oldest bourse, intend to sell 29.96 million shares through the offer-for-sale route, according to its prospectus. The issue represents 27.43% of BSE’s pre-share sale capital.
The issue size is estimated to be Rs1,200-1,300 crore, Mint reported on 10 September. BSE’s draft document listed 262 shareholders who have agreed to sell their shares. Singapore Exchange Ltd (SGX) will sell 5.09 million shares, or a 4.7% stake, making a complete exit from BSE.
In 2016, 27 companies have raised Rs27,000 crore through the IPO route, which is a six-year high for fund-raising through initial share sales, according to data from primary market tracker Prime Database.
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