Shares of IFCI Ltd rallied 6% after the Securities and Exchange Board of India (SEBI) approved the National Stock Exchange's (NSE) much-awaited initial public offering, clearing a key regulatory hurdle for the exchange's long-delayed listing on the bourses.

IFCI, a state-owned non-banking financial company, has indirect exposure to NSE through its majority stake in Stock Holding Corporation of India (SHCIL), which in turn holds shares in the exchange. The SEBI approval of the NSE IPO therefore moved IFCI's stock as investors priced in the value of that indirect holding ahead of the exchange's market debut.

Such pre-listing moves in companies with shareholdings in a forthcoming IPO are not unusual in Indian markets, where holders of unlisted exchange stakes have historically seen their valuations re-rated as a listing becomes more concrete. For IFCI, which has undergone a prolonged restructuring phase and remains a government-controlled institution, the NSE listing is a rare external catalyst that investors can tie to a measurable asset value.

The rally extends an already remarkable run for the stock: IFCI shares have surged more than 500% over the past three years, turning it into a multibagger. According to the report, analysts see scope for further upside following the SEBI clearance.

NSE is India's largest derivatives exchange and one of the biggest equities exchanges in the world by trading volume. Its IPO has been one of the most anticipated listings in the Indian market, and SEBI's approval brings the exchange's Dalal Street debut a step closer. The exchange had delayed its listing plans for years amid pending regulatory matters, making this clearance a meaningful procedural milestone.

Source: Economic Times Markets