Over a dozen major institutional and corporate investors are expected to sell shares in the proposed initial public offering (IPO) of National Stock Exchange (NSE) while its biggest investor Life Insurance Corp. of India may hold on to its stake, two people aware of the matter said. India's largest stock exchange is expected to file draft offer documents for its IPO this week, in one of the most anticipated share sales of recent times.
State Bank of India, Bank of Baroda, Stock Holding Corp. of India (SHCIL), Indian Bank, The New India Assurance Co. Ltd, The Oriental Insurance Co., General Insurance Corp. of India (GIC), National Insurance Co. Ltd and ICICI Lombard are among top domestic shareholders who plan to sell around 10% each of their shareholding, the people cited said above on the condition of anonymity.
Among the foreign shareholders also planning to sell 10% each of stake are Canada Pension Plan Investment Board (CPPIB), Temasek, Crown Capital, Ontario Municipal Employees Retirement System (Omers), ChrysCapital and TA Associates, the people said. The IPO will be fully an offer for sale (OFS), meaning while the institutions will sell their shares, NSE itself will not be issuing any fresh shares to raise money.
"Public-sector companies and some global investors are likely to pare stake via the OFS -only IPO. The issue size will likely inch towards 6% of the total equity capital of NSE," said a person involved with the share sale process. "Even at that size, the IPO is likely to succeed given the quality of the business and investor appetite for this segment," the person added. Indian corporates, banks and insurance companies—largely PSUs—together hold around 33.7% in NSE, while foreign investors hold a combined 26.66%.
The draft prospectus would provide analysts and prospective investors key insights into the financials and functioning of India's largest stock exchange. The DRHP filing is followed by road shows, fixing a price band and share sale dates, publication of the final prospectus, issue of shares and the final public listing.
While LIC, India's largest insurance company, is NSE's single-largest shareholder with a 10.72% stake, SBI holds around 3.23% and SHCIL 4.43%. Insurance companies including GIC, New India Assurance, Oriental Insurance and National Insurance hold a combined 5.9%, showed shareholding data as of March end on the NSE website. CPPIB, Crown Capital and Omers hold around 4.76%. Stakes of other investors named earlier in the story do not appear on the NSE website, which captures only those with over a percent of the exchange's equity capital.
Spokespersons for CPPIB and Temasek declined to comment, while queries emailed to other shareholders went unanswered.
Share price data from wealth platform InCred Money shows that at an expected valuation of ₹5.14 trillion, NSE will be over thrice the size of BSE, India's second-largest stock exchange, which has a ₹1.65 trillion market cap.
The filing of NSE's DRHP comes nearly 10 years after the exchange first attempted to go public. NSE had filed offer papers in December 2016, but the eruption of the so-called co-location scandal and surfacing of alleged corporate governance lapses by a previous management put the plans in deep freeze. The exchange then undertook a leadership overhaul and subsequently paid hefty a settlement amount of ₹1,398 crore to Sebi, which granted its no-objection certificate for the IPO in January. On 12 March, NSE appointed 20 merchant bankers for the mega share sale.
NSE ranks as the second largest derivatives exchange globally by the number of contracts traded (51% market share) and second in the equity cash market segment by the number of trades (11% of global market share) as of FY26, per an investor presentation by the bourse dated 15 May. In FY26, it was also the second-largest exchange globally by the number of listings.
In India, NSE had a 93% share of the cash market in the previous fiscal, with BSE holding the rest. In the hugely popular equity options segment, it had a 75% market share, with BSE holding the rest.