New India Assurance, IFCI Rally on NSE's Likely IPO Filing This Week

Shares of The New India Assurance Company and IFCI rose up to 5% on Monday amid reports that the National Stock Exchange (NSE) is likely to file its draft red herring prospectus (DRHP) for its initial public offering (IPO) this week.

According to a CNBC-TV18 report, the NSE is likely to file its IPO papers this week. A separate report by Fortune said the exchange is likely to submit its IPO papers on June 15 or June 16.

The New India Assurance Company holds a 1.42% stake in the NSE. Its shares settled at ₹160.52 on the NSE, up 5.05%, after climbing as much as 7.46% to ₹164.20 during the day. The stock has gained for two consecutive sessions following reports of the NSE's planned DRHP filing.

IFCI, a public sector non-banking financial company, holds a 52% stake in Stock Holding Corporation of India, which in turn owns a 4.4% stake in the NSE. IFCI shares settled at ₹89, up 5.24%.

NSE's Valuation and IPO Process

In February, NSE's board approved proceeding with the IPO through a pure offer-for-sale route, allowing existing shareholders to partially monetise their holdings. The exchange had received a no-objection certificate from Sebi in January this year.

According to multiple reports, in the unlisted market, NSE commands an estimated valuation of over ₹5 lakh crore, with its shares currently trading near ₹2,015 apiece. At this price, the exchange trades at a price-to-earnings ratio of around 40.90.

NSE's ownership is widely distributed among domestic and global financial institutions, insurance companies, and individual investors, with no single shareholder holding a controlling stake.

Trading members, along with their associates and agents, collectively hold about 35.51% of NSE. Among domestic institutional investors, Life Insurance Corporation of India owns 10.7%, followed by Stock Holding Corporation of India at 4.4%, SBI Capital Markets at 4.33% and State Bank of India at 3.23%. Other key shareholders include GIC, New India Assurance and National Insurance Company.

Prominent foreign investors include Aranda Investments (Temasek), Canada Pension Plan Investment Board, Morgan Stanley's MS Strategic Mauritius and Crown Capital.

To manage the IPO process, NSE reportedly appointed 20 merchant bankers in March, including Kotak Mahindra Capital, JM Financial, Axis Capital, IIFL Capital Services, Motilal Oswal Investment Advisors, ICICI Securities, SBI Capital Markets, Nuvama Wealth Management, HDFC Bank, Avendus Capital, Morgan Stanley India and Citigroup Global Markets India.

It also includes JP Morgan India, HSBC Securities and Capital Markets India, IDBI Capital Markets and Securities, 360 ONE WAM, Anand Rathi Advisors, DAM Capital Advisors, Pantomath Capital Advisors and Equirus Capital.