Some of the world’s top asset managers and sovereign wealth funds are lining up to buy a slice of India’s largest stock exchange in its upcoming initial public offering (IPO), according to people familiar with the matter.
Fidelity International Ltd, Prudential Plc and Singapore’s GIC Pte, are likely to participate in the anchor book of the National Stock Exchange of India Ltd’s (NSE) smaller-than-planned IPO, the people said, asking not to be identified because the information is private
Abu Dhabi-based Lunate Capital Ltd, Norway's Norges Bank Investment Management, Eastspring Investments—the Asian asset management unit of Prudential—and American investment major BlackRock Inc are also likely to seek an allocation of shares from the portion reserved for anchor investors before the IPO opens to the broader market.
Domestic institutional investors (DIIs), including mutual funds and insurance companies, are also likely to participate in the anchor book, which will close on 16 September.
The anchor portion is likely to be valued at approximately ₹6,800 crore, less than a third of the truncated IPO size, which will comprise entirely an offer for sale by existing investors. The allocation of shares to participating institutional buyers will be finalized over the next few days ahead of public subscription, which opens on 17 September.
The most-subscribed anchor books in India included the likes of LG Electronics India Ltd, ICICI Prudential Asset Management Co. and SBI Funds Management Ltd, where anchor investors ended up bidding for a much larger number of shares than those on on offer.
Participation by large global funds in the anchor book indicates strong institutional confidence and market validation for the IPO, reassuring retail and domestic investors about the company's valuation and growth prospects.
Representatives for BlackRock, Fidelity, GIC, Eastspring, and Lunate did not immediately respond to requests for comments. Norges Bank declined comment.
A spokesperson for the National Stock Exchange of India also did not respond to a request for comments.
Under Indian capital market regulations, anchor books open before public share sales, allowing institutional investors to bid for and secure allocations. Shares allotted through the anchor book are subject to post-listing lock-ins, barring investors from selling 50% of their allotted shares for 30 days and the remaining 50% for 90 days.
Mint had reported on 10 September that NSE's offer, once touted to be the largest listing in the country, has likely reduced its previously-planned ₹30,000 crore size to around ₹23,000 crore, after a clutch of key investors scaled down their share sales.
This scaled-down IPO will be India's second-largest, after Hyundai Motor India Ltd's ₹27,859 crore (about $3.3 billion) share sale in October 2024.
The NSE has set a price band of ₹1,700-1,785 per share for its IPO.
NSE got the approval of the Securities and Exchange Board of India (Sebi) for its IPO earlier this month, and the exchange is likely to file its draft red herring prospectus (DRHP) with the registrar of companies later on Friday, Mint has learnt.
The NSE originally filed its initial DRHP in December 2016. However, its public listing was derailed for nearly a decade due to regulatory investigations into allegations of preferential access through its co-location facility and dark-fibre infrastructure. The impasse was resolved when Sebi agreed to a ₹1,491.21 crore settlement regarding these cases. Following this, the NSE filed its updated DRHP.