NSE IPO subscription: The Rs 22,569-crore initial public offering of the National Stock Exchange of India (NSE) opened for subscription on Thursday and attracted bids for 43% of the shares available on the first day.The issue is the second-largest IPO in India, behind Hyundai Motor India’s Rs 27,870-crore public offering in 2024.According to exchange data, investors bid for 3.83 crore shares against the 8.86 crore shares offered in the issue. Non-institutional investors subscribed to 72% of their quota, while the retail portion was subscribed 44%. Qualified Institutional Buyers (QIBs) subscribed to 19% of the shares reserved for them.
Why NSE IPO saw muted response on Day 1
The NSE IPO saw lukewarm response, but it’s important to note that sometimes initial public offerings gain momentum in later days. The IPO is scheduled to close on September 21, and the stock is expected to list in September.Also Read | NSE IPO opens for subscription: From GMP, market cap to status & global comparison – top 10 things to knowHowever, for an IPO of NSE’s size, the subscription response was expected to have been better. Multiple reasons could have led to the muted subscription on the first day.One big factor could have been the huge lineup of IPOs this week.The primary market has seen a packed week, despite the shortened trading schedule, with five mainboard and six SME initial public offerings (IPOs) together worth around Rs 24,500 crore lined up for subscription.The Rs 22,561.5-crore NSE IPO accounted for more than 90% of the total issue value. The combined value of IPOs opening between September 14 and 18 is the highest since the week of October 6-10, 2025, when offerings worth around Rs 29,000 crore came to the market.Among the other mainboard issues, Hero Motors, SS Retail and Jindal Supreme India opened on September 16 and will close on September 18. The three companies plan to raise around Rs 1,000 crore, Rs 500 crore and Rs 125 crore, respectively.Veegaland Developers and Manika Plastech, whose IPOs opened last week, closed their offerings during the week. Six SME issues launched last week also concluded their subscription periods.Yet another reason could be valuation related hesitancies.Also Read | NSE IPO: SEBI chief says no proposal from National Stock Exchange seeking approval for trading on its own platformThe IPO of the world’s largest derivatives exchange has come at a point when the segment that has driven its exceptional growth is losing momentum, prompting questions over how much further that derivatives-led expansion can go.The NSE has set a price band of Rs 1,700 to Rs 1,785 ($17.72 to $18.60) per share for its IPO, giving the exchange a valuation of about $46 billion, according to public filings dated September 11.That valuation is 15% to 20% below the level targeted during pre-deal roadshows. It is also 40% below the valuation implied by private-market transactions involving NSE shares in 2024.According to a Reuters report, investors are unwilling to pay more because of the impact of regulatory changes that have weakened growth in options trading. An overhaul of trading rules aimed at bringing Indian markets closer to global standards has also added to the uncertainty.The NSE derives 80% of its revenue from trading, with options accounting for 60% of that trading revenue. Options volumes have fallen 27% from their peak in 2024.The National Stock Exchange’s decision to reduce the size of its IPO and set the price below earlier market expectations has raised questions over whether India’s largest exchange is opting for a more cautious listing strategy rather than seeking a more aggressive valuation.The IPO is entirely an offer for sale, meaning NSE itself will not raise fresh capital through the issue. Instead, existing shareholders are selling a portion of their holdings to public investors.As a result, the size of the offering is directly tied to the number of shares shareholders choose to sell. A lower level of shareholder participation, or a decision by investors to retain more of their holdings ahead of the listing, automatically reduces the size of the IPO.The size of the offering has been reduced from the earlier plan to sell 14.9 crore shares, bringing the overall issue value down from the initial estimate of around Rs 30,000 crore. At Rs 1,700 per share, the IPO is estimated at around Rs 21,494 crore, while the upper end of the price band takes the issue size to about Rs 22,569 crore.Even with the lower valuation, however, the NSE would still rank among the 10 largest listed exchanges in the world.A day before the IPO opened, NSE raised Rs 6,746 crore from anchor investors. The investors included state-owned Life Insurance Corporation of India (LIC), Goldman Sachs and Fidelity. Sovereign wealth funds GIC Singapore, Abu Dhabi Investment Authority (ADIA) and Norges Bank also took part, along with Eastspring and HSBC Global Asset Management.With the revised size, the NSE issue has moved ahead of LIC’s Rs 21,000-crore IPO in 2022, making it the second-largest public offering in India, but it remains smaller than Hyundai Motor India’s record issue.(Disclaimer: Recommendations and views on the stock market, or any other asset classes or personal finance management tips given by experts and analysts are their own. These opinions do not represent the views of The Times of India.)
