NSE IPO windfall: Early institutional investors set for multifold gains

Several institutional investors acquired NSE shares at fractions of a rupee, positioning them for substantial gains as the exchange prepares for what could be India's largest IPO

The National Stock Exchange’s (NSE’s) long-awaited initial public offering (IPO) is set to unlock massive gains for a wide spectrum of shareholders — from public sector lenders and insurers to offshore wealth funds and pension managers. 

NSE is the largest exchange in the country. Established in 1992, it saw initial investors with institutions such as IDBI, Life Insurance Corporation (LIC), and State Bank of India (SBI). SBI, however, first acquired NSE shares in August 1993. 

While LIC, the largest shareholder in the exchange, is not selling any stake in the nearly ₹30,000 crore offer for sale (OFS), SBI and other institutional investors are collectively offering 6 per cent stake, estimating NSE’s valuation at around ₹5 trillion. 

 

According to the IPO documents, SBI holds 79.8 million shares at a weighted average cost of ₹0.80 per share, while Bank of Baroda’s (BoB’s) acquisition cost stands at ₹0.54 per share. SBI is offering up to 24.7 million shares in the OFS, while BoB has offered 10.89 million shares. The shares of NSE are trading at around ₹2,055 apiece in the unlisted market, according to UnlistedZone. At this price, SBI’s stake sale is being pegged at over ₹5,000 crore. 

At present, SBI holds a 3.23 per cent stake in the company. Post-IPO, its stake will drop to 2.2 per cent. 

Stock Holding Corporation of India acquired its stake at ₹0.46 per share. Among other public sector undertakings (PSUs), New India Assurance Company, National Insurance Company, and The Oriental Insurance Company each hold shares acquired at ₹0.32 apiece, while United India Insurance’s cost is ₹0.50 per share. 

Among other selling shareholders, MS Strategic (Mauritius) — an associate of Morgan Stanley — has an acquisition cost of ₹66.54 per share, pegging its gain at around ₹3,000 crore in the stake sale. 

Canada Pension Plan Investment Board’s weighted acquisition cost comes at ₹324.13 per share, and that of Aranda Investments (Mauritius), an arm of Singapore’s Temasek, is ₹62.38. 

The IPO will comprise up to 148.9 million equity shares, or nearly 6 per cent of paid-up capital of NSE, of face value ₹1 each, with no fresh issue component. The size of the IPO is pegged to be over ₹30,000 crore, based on the market capitalisation in the unlisted market, making it the largest IPO ever. Ace investor Radhakishan Damani is also amongst the top 10 shareholders with around 1.68 per cent stake in the exchange. 

A significant factor influencing these costs is the 4:1 bonus issue undertaken in November 2024, which effectively reduced the acquisition cost for long-term investors. 

While early investors are set to make multifold gains, recent transactions have been at higher acquisition costs. The weighted average acquisition cost of shares transacted over the past year stands at ₹1,909.02, with deals occurring in a range of ₹1,350 to ₹2,260 per share. Over a three-year period, however, the average drops sharply to ₹229.23. 

With momentum building around the IPO, the NSE saw a surge in retail investors in the last two years, making it one of the widely traded stocks in the unlisted market. The number of retail shareholders — or those with up to ₹2 lakh investments — is around 185,000, accounting for 12.42 per cent shareholding. 

Shares of the NSE shareholders such as LIC, SBI, and New India Assurance also surged following the filing of the draft red herring prospectus (DRHP). The NSE IPO is being closely watched by market participants as hopes for revival in the primary market have gained after the filing. Further, the filing ends a decade-long wait for the exchange, which has sought to resolve regulatory overhang in the last few years through settlements in several cases and efforts to strengthen governance. The NSE has noted that its revised settlement applications in respect of the Colocation and Dark Fibre matters, which were filed with the Securities and Exchange Board of India in March 2026, are pending as at the date of the DRHP. The exchange has made provisions for the same.