By Kushal Bhatt
India’s largest stock exchange said it plans to file by January a draft red herring prospectus to list its share and file for an overseas listing in coming year. The decision was made on 23 June, 2016. According to the NSE’s statement, BSE the rival of NSE also has similar plans to sell a 30% stake through IPOs that would comprise an offer for sale by existing shareholders and might include possible fresh sale of shares.2016 had been a very good year for IPOs, because in first nine months of 2016, companies have raised Rs. 19,379 crore and raised almost $3 billion through IPO. Now it is time to look out for the future to see what 2017 has in store for us. Many big companies are set to offer their IPOs in 2017, but the biggest IPOs will be of Vodafone, BSE and NSE. In 2016 only hand calculated IPO’s failed to attract investors.
NSE which was set up in 1992 has been under pressure from institutional investors to float in IPO’s to provide them an exit option. The NSE’s single biggest shareholder is state run LIC, which holds about 12.51% stake in the bourse. Overall state run insurers together own nearly a fifth of the exchange. SBI holds 10.19% and 4.33%, resp, while IFCI, IDBI Bank and IDFC Banks are among the other domestic shareholders. Foreign shareholders include investment banking giant Goldman Sachs, Singapore state investment firm Temasek, private equity firm SAIF partners, who each hold 5% of the NSE.
Global investors are eying handsome returns in upcoming IPO of NSE, whose IPO is valued at around Rs 45,000 crores. The draft says 111.41 million shares would be sold by 27 existing shareholders. This works out to be rupees 898 a share. Tiger Global, the largest selling shareholder, is exiting by selling 14.85 million shares. SAIF Partners, among the foreign investors that first picked a five percent stake in NSE in 2007, is also selling 9.9 million of its 24.75million shareholding. Norwest Venture Partners is selling 7.84 million of its shares that would fetch close to Rs 700 crores.
So let’s wait for the biggest IPO of 2017 and keep an eye on how it affects the market.