NSE appoints 4 investment banks for its IPO

Citi, JM, Kotak, Morgan Stanley selected as lead bankers

The National Stock Exchange (NSE), India’s largest stock exchange, has appointed Citibank, JM Financial, Kotak Mahindra and Morgan Stanley as lead investment banks to manage its much-awaited initial public offer (IPO).

“NSE has moved closer to listing its shares. The exchange is committed to list its shares at the earliest possible time frame. As a step towards the same, the Board of NSE, in its meeting held on August 22, 2016, decided to engage the following four Joint global co-ordinators....” the exchange said in a release.

Cyril Amarchand Mangaldas has been appointed as legal advisor for the IPO. The exchange has also appointed Price Waterhouse & Co and Chartered Accountants LLP as joint statutory auditors for the financial year 2016-17 along with its current statutory auditors and as sole statutory auditors for the financial years 2017-21, “subject to the approval and ratification of shareholders as may be applicable”.

“With these steps, NSE expects the listing process to gain further momentum. NSE will consider appointment of more banks for additional roles as may be felt expedient,” NSE said.

Interestingly, Morgan Stanley and Citi own three per cent and two per cent stakes, respectively, in the exchange through their respective investment arms MS Strategic (Mauritius) and Citigroup Strategic Holdings Mauritius, the shareholding pattern for June shows.

NSE’s rival BSE has already appointed seven merchant bankers – Edelweiss Financial Services, Axis Capital, Jefferies, Nomura, Deutsche Bank, Motilal Oswal and SBI Capital Markets – to handle its IPO. BSE is looking to raise anywhere between Rs 400 crore and Rs 1,200 crore from the IPO. NSE's issue size is expected to be larger.

In a meeting on June 23, the NSE board had given its nod to list in India and overseas. The exchange had said it would file a draft prospectus with market regulator Securities and Exchange Board of India (Sebi) by January 2017 for domestic listing, and another one for overseas listing by April next year.

According to an earlier report by Business Standard, NSE could get a premium valuation compared to global peers, thanks to higher growth potential in India. Mauritius-based Veracity Investments recently acquired a five per cent stake in NSE from State Bank of India for Rs 911 crore, valuing the exchange at Rs 18,200 crore.