NSE files DRHP for IPO as SBI, insurers and other shareholders plan stake sale

As investors gear up for the NSE's Rs 30,000-crore IPO, set to become India's second-largest public offering after Jio Platforms' blockbuster issue, Zerodha founder and CEO Nithin Kamath has used the occasion to raise a broader question: why are there so few Indian companies like the stock exchange?In a post on X, formerly Twitter, Kamath described NSE as a "cash generation and distribution machine", noting that the exchange earned more than Rs 10,300 crore in profit in FY26 and distributed about Rs 8,660 crore as dividends, translating into a payout ratio of 84%.According to Kamath, such generous shareholder payouts are likely to continue even after NSE's listing because the exchange has limited avenues to deploy its surplus cash. He argued that regulatory restrictions prevent exchanges from investing in other businesses, whether listed or private, leaving dividend distribution as one of the few meaningful uses of excess profits.Also read: NSE IPO: 10 key things investors need to know about India’s largest IPO in historyThe NSE example, he said, raises a broader question: why are there so few businesses that consistently generate large profits and return most of them to shareholders? Kamath's answer lies in what he calls a tax arbitrage between dividends and capital gains.He explained that when a company earns Rs 100 in profit, it first pays corporate tax, leaving roughly Rs 75. If that amount is distributed as dividends, shareholders pay tax again at their marginal income-tax rate. For investors in the highest tax bracket, this can significantly reduce the final amount received.By contrast, if a company retains those earnings and reinvests them into growth, shareholders can potentially benefit through appreciation in the stock price. In such a case, investors pay capital gains tax only when they sell their shares, and at a substantially lower rate than dividend income, Kamath noted.This disparity, he argued, creates a strong incentive for companies to retain earnings and pursue growth rather than distribute profits to shareholders. In his view, that may be one reason why many modern businesses prioritise expansion and reinvestment over profitability and cash returns.Read more: NSE IPO: BSE hosts double the listed companies but numbers tell a different storyWhile acknowledging that reinvestment benefits the economy by funding growth, Kamath cautioned that businesses that do not generate meaningful profits can become more vulnerable during downturns. "One bad cycle can kneecap them severely," he wrote, arguing that long-term resilience often comes from sustainable profitability.Using NSE as a case study, Kamath also revived the debate around the double taxation of corporate profits — first at the company level and then at the shareholder level through dividend taxation. He pointed to examples of countries that have attempted to reduce this burden and argued that there should not be such a wide gap between the taxation of dividend income and capital gains.“I think there should not be such a big differential in taxes, on dividend income as compared to capital gain,” Kamath added. The NSE IPO is entirely an offer-for-sale (OFS) of up to 14.89 crore equity shares with a face value of Re 1 each, representing nearly 6% of NSE's paid-up equity capital. The issue size has been fixed at 6% of the exchange's paid-up capital. NSE's shares will be listed on BSE, mirroring the arrangement under which BSE's own shares are listed on NSE. With NSE's valuation in the unlisted market hovering around Rs 5 lakh crore, market estimates suggest the IPO could be sized at roughly Rs 30,000 crore.The filing marks the culmination of a listing process first initiated in December 2016, when NSE filed its first DRHP for a Rs 10,000-crore issue. The process was subsequently stalled due to the co-location controversy.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

Mumbai: A windfall awaits the dozens of investors, including institutions, funds, individuals and corporates in the upcoming Initial Public Offering (IPO) of the National Stock Exchange.Among the top 10 shareholders selling a portion of their stakes in the country's largest issue yet, public sector banks and insurers, including SBI, Bank of Baroda, General Insurance Corporation of India, The New India Assurance, National Insurance and United India Insurance, are set to rake in substantial gains.SBI is set to mop up over ₹5,000 crore in gains from the sale of 2.47 crore shares in the NSE IPO based on Thursday's price of ₹2,055 in the unlisted market. The country's largest lender's average cost was ₹1.98 crore131844044Other top-selling funds and institutions may receive ₹1,200 crore - 3,100 crore from the share sale. Some of these stakes were purchased in the early 90s at the time of NSE's setting up.Institutional shareholders such as Life Insurance Corporation of India (LIC) and SBI Capital Markets, which are not selling their stakes in the IPOs, are also sitting on eye-popping gains. For instance, LIC's 10.7% stake in NSE could be worth ₹54,514 crore, based on the unlisted share price. This is nearly a tenth of its own market capitalisation of ₹5,44,645.55 crore on Thursday's close.SBI Capital Markets and PI Opportunities Fund I's portions would be worth ₹22,040 crore and ₹11,960 crore, respectively.Individual shareholders also stand to make hefty gains, though these investors are not offering their stakes in the IPO.

Shares of several listed companies holding stakes in the National Stock Exchange (NSE) rallied on Thursday after the exchange filed its draft red herring prospectus (DRHP) for its initial public offering (IPO) with the Securities and Exchange Board of India (SEBI) late on Wednesday. The development revived market interest in NSE-linked entities.Following the filing, shares of key NSE stakeholders surged during intraday trade. Companies such as State Bank of India, Bank of Baroda, General Insurance Corporation of India (GIC Re), and The New India Assurance Company saw their stock prices rise between 2 percent and 14 percent. The rally reflected investor optimism over the valuation and liquidity potential of NSE’s long-awaited listing.Other NSE-linked stocks, including GeeCee Ventures and Maithan Alloys, surged with gains reaching as high as 7 percent and 11 percent, respectively. 2,500x Return: SBI's ₹2 Cr Investment In NSE To Fetch ₹5,000 Cr From Stake Sale Broader participation was seen across other institutional shareholders such as LIC, HDFC Bank, ICICI Lombard, HDFC Life, Motilal Oswal Financial Services, and SBI Life Insurance, with most of them trading higher in the range of 0.2 percent to 3.4 percent.The overall market reaction highlights strong investor sentiment around the NSE IPO, which is expected to be one of the largest listings in India’s capital markets.The proposed IPO is structured entirely as an offer for sale (OFS), involving 14.89 crore shares. Under this structure, existing shareholders will collectively divest around 6 percent of their holdings in the exchange. NSE Files DRHP For ₹30,000 Crore IPO; Stakeholders To Divest 6% In Complete OFS Since no fresh shares are being issued, the proceeds will go entirely to selling shareholders.Several institutional shareholders are participating in the OFS, including Canada Pension Plan Investment Board, Aranda Investments (Mauritius), Stock Holding Corporation of India, GIC Re, New India Assurance, National Insurance Company, and United India Assurance Company. PSU banks and financial institutions also form a significant part of the selling group.State Bank of India holds a 3.23 percent stake in NSE, while SBI Capital Markets owns 4.33 percent. Stock Holding Corporation of India holds a 4.44 percent stake. These holdings have now come into focus as the IPO process moves forward.

State Bank of India (SBI) is expected to emerge as the biggest beneficiary in the National Stock Exchange (NSE) initial public offering, as it prepares to sell 2.47 crore shares. Based on current unlisted market valuations, the stake sale could generate nearly ₹4,950 crore for the bank.A key highlight of SBI’s investment is its extraordinarily low weighted average acquisition cost of just 80 paise per share, reflecting decades of value creation by NSE and the compounding effect of corporate actions over time. This makes SBI’s exit—or partial exit—one of the most lucrative institutional investments in Indian capital markets.Other major global investors are also set to gain significantly. Mauritius-based MS Strategic is expected to earn around ₹3,200 crore from its planned divestment of 1.6 crore shares. Canadian pension fund CPPIB could realise approximately ₹2,375 crore, while Aranda Investments is projected to monetise about ₹2,250 crore from its stake sale.Several domestic institutions that were early backers of NSE are also positioned for strong gains. NSE Files DRHP For ₹30,000 Crore IPO; Stakeholders To Divest 6% In Complete OFS Bank of Baroda and Stock Holding Corporation of India, both of which acquired shares at less than ₹1 per share, are expected to unlock more than ₹2,100 crore each through the IPO process.Public sector insurance companies are also among the major winners. General Insurance Corporation of India (GIC Re) and New India Assurance are likely to realise over ₹2,100 crore each, while National Insurance Company and United India Insurance are expected to generate around ₹1,200 crore apiece from their holdings.In total, the top 10 selling shareholders are projected to collectively earn nearly ₹24,000 crore based on NSE’s current unlisted valuation of around ₹5 lakh crore. The scale of returns highlights one of the most successful long-term value creation stories in India’s financial sector.However, not all major investors are exiting. Life Insurance Corporation of India (LIC), which holds a 10.72% stake in NSE, has opted not to participate in the offer-for-sale, signalling continued confidence in the exchange’s long-term growth prospects.

The National Stock Exchange (NSE), India’s largest stock exchange, has formally launched its long-pending initial public offering (IPO) process by filing a 614-page draft red herring prospectus (DRHP) with SEBI and the BSE. The shares of NSE will be listed on the BSE, mirroring the cross-listing structure where BSE shares trade on the NSE.The IPO is structured entirely as an offer for sale (OFS), with existing shareholders collectively planning to divest around 6% of the exchange’s equity. Based on NSE’s estimated unlisted valuation of about ₹5 lakh crore, the issue size is projected at approximately ₹30,000 crore, making it one of the largest IPOs in India in recent years, comparable to major listings such as Hyundai Motor India’s ₹27,000 crore issue.Life Insurance Corporation of India (LIC), despite being a major stakeholder in NSE, is not part of the selling group in this IPO. Among the largest sellers is the State Bank of India (SBI), offering up to 24.75 million shares. NSE Extends Equity Derivatives Trading By 10 Minutes From August 3, F&O Market To Remain Open Till 3:40 PM Other key divesting entities include MS Strategic (Mauritius) with 16 million shares and the Canada Pension Plan Investment Board with 11.87 million shares.Additional participants in the OFS include Aranda Investments (Mauritius), Bank of Baroda, Stock Holding Corporation of India, General Insurance Corporation of India (GIC Re), The New India Assurance Company, National Insurance Company, and United India Insurance Company, all collectively offloading significant stakes.The IPO filing follows approvals from NSE’s board, which cleared the DRHP after its IPO committee finalized the documentation. SEBI had already issued a No Objection Certificate in January 2026, enabling the listing process after resolving earlier regulatory concerns related to co-location and governance issues.NSE’s listing plan had been stalled since 2016, when its initial IPO proposal was withdrawn following regulatory concerns. Since then, the exchange has implemented multiple governance reforms and engaged several merchant bankers and legal advisors to revive the process. The exchange now has nearly 1.8 lakh shareholders, marking one of the most widely held ownership structures in Indian financial markets.

Shares of IFCI, IDBI Bank, SBI and others rose up to 3% on Thursday after the draft IPO papers filed by the National Stock Exchange (NSE) named the companies as the selling shareholders in the OFS component of the public issue that is expected to be India’s largest in history.IFCI was the top gainer, rising 3% to Rs 92.60. Bank of Baroda followed suit, up over 2% at Rs 287. SBI traded marginally higher, while HDFC Life rose over a percent to Rs 589 per share. IDBI Bank, following its stellar 20% rise in the previous session, dipped over 4% on Thursday.NSE filed its Draft Red Herring Prospectus (DRHP) with capital markets regulator SEBI on Wednesday, setting the ball rolling for an IPO that has been delayed for nearly a decade. The maiden public issue of the stock exchange will entirely comprise an offer for sale (OFS) of up to 14.89 crore shares or a 22.5% stake, expected to be worth around $3 billion.IDBI Bank has been listed out as the largest listed selling shareholder in the OFS, as it aims to offload nearly 74.16 lakh shares in the NSE through its IPO. State Bank of India follows, offering 64.28 lakh shares, while IFCI offers 34.32 lakh shares. Bank of Baroda meanwhile aims to offload 10.99 lakh shares via the OFS.HDFC Standard Life Insurance Company, which is now known as HDFC Life Insurance Company, is offering 24.75 lakh shares. Bajaj Holdings & Investment meanwhile is selling 20.40 lakh shares via the OFS.Also read: NSE files DRHP for mega $3 billion IPO, SBI among 10 investors to sell stakeSharp surge in IFCI, IDBI Bank shares ahead of NSE IPO filingNotably, these stocks have seen significant surge in recent days amid rising buzz over NSE soon filing its DRHP. IDBI Bank shares rallied more than 17% on Wednesday, surging 24% in one week and 29% in one month.IFCI shares jumped nearly 28% in one week and 45% in one month to hit fresh record highs. The rally was driven by the fact that IFCI owns a 52.86% stake in Stock Holding Corporation of India (SHCIL), which in turn, holds 4.4% of NSE as of the December quarter. Through its controlling interest in SHCIL, IFCI enjoys indirect exposure to NSE, making its stock particularly sensitive to developments related to the exchange’s IPO. SBI, Bank of Baroda, HDFC Life Insurance Company and Bajaj Holdings & Investment shares have gained 3-7% in one week amid the rising buzz around NSE IPO and overall optimism in stock markets.Also read: 10 key things investors need to know about NSE IPOWho are the other selling shareholders in NSE IPO?Tiger Global Five Holdings has been named as the largest shareholder participating in NSE’s IPO, as it aims to sell 1.48 crore shares via the OFS. Aranda Investments (Mauritius) Pte and SAIF II-SE Investments Mauritius plan to sell 99 lakh shares each, while GAGIL FDI offers to sell 86.62 crore shares.Other selling shareholders in NSE’s mega IPO include Norwest Venture Partners X FII – Mauritius (78.37 lakh shares), Citigroup Strategic Holdings Mauritius (74.25 lakh shares), GS Strategic Investments (67.50 lakh shares), MS Strategic (Mauritius) (44.55 lakh shares), Quantum (M) Limited (42.33 lakh shares), PI Opportunities Fund – I (40 lakh shares), Housing Development Finance Corporation (8.11 lakh shares), GTI Capital Epsilon (7.26 lakh shares), Beacon India Private Equity Fund (7.02 lakh shares), Wolf Creek MB (6.71 lakh shares), Wolf Creek BMD MB (6.33 lakh shares), WCP Holdings III (6.19 lakh shares), J. Caird BMD MB (4.25 lakh shares), J. Caird MB (3.59 lakh shares), Quissett BMD MB (1.14 lakh shares) and Quissett MB (86,250 shares).NSE’s much awaited IPO will provide liquidity for several long-term institutional investors while marking a major milestone for the country's leading stock exchange. Earlier this year, SEBI granted a no-objection certificate (NOC) for NSE's much-awaited IPO, removing a key regulatory hurdle that had delayed the process for years.NSE currently trades in the unlisted market at around Rs 1,950-2,050 per share, implying a valuation of nearly Rs 5 lakh crore. This would make it one of the most valuable listed financial institutions in India once the public issue is completed.According to Nitant Darekar, Research Analyst at Bonanza, the exchange is already commanding premium valuations in the unlisted market. "NSE remains a capital-light near-monopoly. At around Rs 1,950-2,170 in the unlisted market, it trades near 45x FY26 earnings. That's rich, but below BSE at around 70x and MCX at around 80x," Darekar said, adding that the recent settlement of the long-running co-location case has removed a key overhang that had weighed on the listing process for years.Unlike most IPOs, where companies raise capital to fund expansion plans, NSE's IPO is largely intended to provide liquidity and an exit route for long-standing investors.