NSE Files ₹30,000-Crore IPO, India's Biggest Ever Public Issue

The National Stock Exchange filed its draft red herring prospectus on Wednesday, setting the stage for what will be the largest public issue in Indian stock market history. The ₹30,000-crore offer is entirely an offer for sale of 14.89 crore shares, or about 6% of the exchange's equity, with existing shareholders selling down their stakes.

The filing ends nearly a decade of regulatory limbo. Sebi granted its no-objection certificate in February after the exchange settled the co-location case by paying ₹1,388 crore in 2025. Chairman Tuhin Kanta Pandey had said in January that in-principle approval was cleared for the settlement, a move widely seen as unblocking the listing path.

State Bank of India will offload up to 2.48 crore shares. MS Strategic (Mauritius) Limited, a shareholder with about 1.60 crore shares, also figures among the top sellers. Others include Canada Pension Plan Investment Board (1.19 crore), Aranda Investments (1.12 crore), Bank of Baroda (1.10 crore), Stock Holding Corporation (1.09 crore), General Insurance Corporation (1.07 crore), New India Assurance (1.05 crore), National Insurance (0.60 crore) and United India Insurance (0.60 crore).

Life Insurance Corporation of India, the single largest shareholder with a 10.72% stake, is not selling any shares. That decision keeps NSE's most influential institutional holder anchored through the listing.

At the estimated ₹30,000-crore IPO size and 6% stake dilution, the implied market capitalisation crosses ₹5 lakh crore. That would make NSE one of the most valuable financial exchanges globally by market cap, ahead of many developed-market peers on a price-to-earnings basis. The exchange reported a profit after tax of ₹10,302 crore in FY26, down 15% from ₹12,188 crore the year before. Total income slipped to ₹18,713 crore from ₹19,177 crore. The March quarter showed a reversal: PAT rose 8% to ₹2,871 crore, and total income jumped 22% to ₹5,360 crore.

The simple read is straightforward: a ₹30,000-crore supply event in a market that has seen record IPO volumes over the past 18 months. The listing will test whether the premium investors assign to NSE's monopoly position – it handles over 90% of equity derivatives volumes in India – can justify a valuation that implies a P/E above 50x trailing earnings.

The better market read digs into the shareholder mix. LIC not selling signals confidence from India's largest domestic institutional investor. The selling is concentrated among banks, insurers and foreign funds, many of whom held stakes acquired before the co-location crisis. Their exit at a ₹5-lakh-crore valuation suggests they believe the current price is as good as it gets near term. At the same time, the OFS structure means no new capital comes to the exchange, only secondary liquidity.

The IPO timeline depends on Sebi's review of the DRHP, typically a two- to four-month process in India for large issues. NSE has appointed 20 merchant banks including Kotak Mahindra, Morgan Stanley, Goldman Sachs and JM Financial, suggesting a fast-track approval target. The actual launch could come in the September-December window if market conditions hold.

The key risk for investors sizing the deal is earnings momentum. The FY26 profit decline was driven by higher settlement costs and normalisation of trading volumes after the exceptional FY25. April and May data so far show average daily turnover in the cash equity segment flat year-on-year and derivatives volumes slightly off the peak. A continued slowdown would make the 50x multiple harder to defend.

LIC's decision to retain its entire 10.72% stake serves as an underwritten endorsement. The insurance giant's holding period is long-term – its exit horizon is measured in decades, not months. The real demand test will come from domestic mutual funds and foreign portfolio investors who must decide whether NSE's growth trajectory justifies the premium.

One concrete factor to track through the DRHP: the price band. NSE's board approved the IPO in February but has not disclosed a valuation range. The draft papers will fix a band only at the time of the launch. A conservative band – say, 40-45x annualised Q4 earnings – would leave room for listing gains. An aggressive band near 55x would bake in a double-digit earnings recovery that is not yet visible in the data.

What would reduce the risk: sustained cash market volumes through the next quarter, a price band set below 50x, and anchor allocations that lock in large domestic institutions. What would make it worse: a sharp correction in Indian equities, regulatory reopening of the co-location case (unlikely but not impossible), or the exchange reporting another quarter of profit contraction.