NSE IPO: From DRHP to RHP, here’s what has changed

The bourse has cut the offer-for-sale (OFS) to 12.64 crore equity shares from 14.9 crore shares proposed in the DRHP, roughly a reduction of 15%. Since the IPO is entirely an OFS, the cut in the number of shares directly brings down the overall issue size.

At the newly announced price band of ₹1,700-1,785 per share, the IPO is estimated to raise ₹21,494-22,569 crore. This is significantly lower than the earlier estimate of around ₹30,000 crore.

The smaller issue size also changes its position among India's largest IPOs. At the upper end of the price band, the issue is estimated at ₹22,569 crore, making it the country's second-largest public issue after Hyundai Motor India's ₹27,870-crore IPO in 2024. It will, however, be larger than the ₹21,000-crore IPO of Life Insurance Corporation of India (LIC) launched in 2022.

The price at which NSE is coming to the market has also been revised. The IPO was earlier expected to be priced at around ₹2,000-2,100 per share, but the price band has now been fixed at ₹1,700-1,785 per share.

The lower price band, along with the reduced OFS, means the exchange's implied valuation will be ₹4.2 lakh crore, lower than earlier estimate of ₹5 lakh crore.

The change in issue size is mainly reflected in the revised share-sale plans of several existing shareholders. For instance, State Bank of India (SBI) has reduced its proposed sale from 2.47 crore shares to 1.6 crore shares. MS Strategic (Mauritius) Ltd has cut its offer from 1.6 crore shares to 1.1 crore shares.

Similarly, Bank of Baroda has lowered its proposed sale from 1.09 crore shares to 76.9 lakh shares, while Stock Holding Corporation of India Ltd has reduced its offer from 1.08 crore shares to 61.87 lakh shares. General Insurance Corporation of India has slashed its proposed sale from 1.06 crore shares to 61.87 lakh shares, National Insurance Company Ltd has reduced its offer from 60 lakh shares to 40 lakh shares and Mahagony Ltd has trimmed its offer size to 30 lakh from 50 lakh.

Some shareholders, however, have retained their earlier proposed sale. Canada Pension Plan Investment Board continues to offer 1.18 crore shares, while Aranda Investments (Mauritius), New India Assurance Company Ltd and United India Insurance Company Ltd have retained their offer at 1.12 crore, 1.05 crore and 60 lakh shares, respectively.

The revised documents also have SBI Capital Markets Ltd as a selling shareholder, which was not part of the list in the DRHP.

The lower pricing of the IPO could be the reason for some selling shareholders to cut their offer size as they believe they could command a better valuation by offloading their stake at a later stage.

The IPO is entirely an OFS, meaning NSE is not issuing any new shares and will not receive any proceeds from the public issue. The money raised will instead accrue to the existing shareholders selling their shares.

The issue will open for subscription on September 17 and close on September 21, with anchor investor bidding scheduled for September 16. NSE shares are slated to make their market debut on September 24.