The National Stock Exchange of India's (NSE) long-awaited initial public offering has moved a step closer after the Securities and Exchange Board of India (Sebi) approved the exchange's draft offer plan for a proposed Rs 30,000-crore issue. If completed at that size, the offering would rank among the largest IPOs in India, placing it in the same bracket as major listings such as Life Insurance Corporation's 2022 offer.

The IPO will be structured entirely as an offer for sale (OFS), meaning no new shares will be issued by the exchange. Instead, the offering will allow NSE's existing shareholders to dilute their stakes. NSE's shareholder base includes domestic and foreign institutional investors as well as early individual shareholders, many of whom have held stakes for years awaiting an exit opportunity through a listing.

A listing on the stock market would mark the end of a process that was first initiated in 2016 but subsequently stalled amid regulatory concerns. Those concerns were linked in part to the co-location case, in which the exchange faced allegations that certain brokers gained preferential access to its trading servers, an episode Sebi examined through lengthy proceedings. The exchange filed its draft red herring prospectus (DRHP) with Sebi in June this year.

NSE's listing would follow that of rival BSE, which completed its own IPO in 2017, giving investors a rare chance to own shares of India's dominant equities and derivatives marketplace. The approval also comes as Indian primary markets remain among the busiest globally for new listings, and market participants will now watch for the filing of the updated offer documents and the announcement of a price band and timetable, steps that typically precede a public issue.

Source: Economic Times Markets