NSE sets IPO price band at ₹1700–₹1785; subscription begins September 17

The Initial Public Offering (IPO) of the National Stock Exchange of India (NSE) concluded with a subscription on Monday, September 21. The offering, valued at ₹22,562 crore, received bids for 50.58 crore shares against an offer of 8.86 crore, resulting in an overall subscription of 5.71 times.

However, the overall subscription figure masks a significant divergence between the interest shown by institutional and retail investors. Qualified Institutional Buyers (QIBs) subscribed 12.68 times more than their allocated portion, while Non-Institutional Investors (NIIs) subscribed 6.55 times. Meanwhile, the retail segment received bids for 6.13 crore shares compared to 4.41 crore, leading to a relatively modest subscription of 1.39 times.

The NSE IPO became the second largest public offering in India after Hyundai Motor India's IPO, which was worth ₹27,858.75 crore in 2024. The exchange company set a price band of ₹1,700–₹1,785 per share, with a lot size of eight shares, meaning a retail investor needed a minimum of ₹14,280 at the upper end of the price band.

Reasons for Retail Investor Caution

One of the key aspects of the NSE offering was its sheer magnitude. The total amount of approximately ₹22,562 crore required a substantial volume of capital, even though the minimum retail application was ₹14,280. Furthermore, the offering was entirely an Offer for Sale (OFS), meaning the proceeds would go to existing shareholders selling their stakes, not to NSE itself as new capital.

Another factor was changing expectations regarding listing gains. Market data showed a sharp weakening of the grey market premium during the IPO period. The premium dropped to about 2 percent from a peak of around 20 percent during trading, which could reduce attractiveness for investors focused on short-term listing profits.

Santosh Mina, Head of Research at Swastika Investmart, noted that retail investors are adopting a more selective approach to the NSE IPO amidst a crowded primary market where numerous offerings compete for the same pool of capital. He stated: 'The relatively modest grey market premium also lowered expectations for immediate listing gains. At the same time, the IPO is entirely an Offer for Sale, meaning there is no inflow of new capital for NSE.' Mina added that concerns over regulatory changes affecting F&O, which remains a vital part of NSE's business, might also prompt some investors to remain cautious. He concluded: 'Given the size of the offering at ₹22,561.57 crore, the subscription requirements are also significant, making the retail response relatively restrained compared to smaller IPOs.'

Comparison of NSE Retail Demand with Other Indian Mega-IPOs

The relatively modest retail subscription of 1.39 times becomes clearer when compared to some of India's largest IPOs. According to Prime Database, Coal India showed a retail subscription of 2.21 times, and LG Electronics India showed 3.39 times. LIC, another major IPO, demonstrated a retail subscription of 1.61 times. Compared to these, the retail subscription for NSE at 1.39 times was the lowest of the three.

Nevertheless, several other large offerings also recorded relatively moderate retail demand. HDB Financial Services showed a retail subscription of 1.43 times, and Paytm showed 1.27 times. Tata Capital and Swiggy each registered a retail subscription of 1.06 times.

Prime Database data also indicates that Hyundai Motor India, the country's largest IPO worth ₹27,858.75 crore, had a retail subscription of only 0.44 times. General Insurance Corporation of India (GIC) showed 0.59 times.

Significance of Valuation and Listing Gain Expectations

Abhinav Tiwari, Senior Research Analyst at Bonanza, pointed to the difference between the NSE IPO price and its previous non-listed valuation as another factor influencing retail investor participation. He noted: 'The main concern for investors is the gap between the NSE IPO price and its previous non-listed market price. The upper price band of ₹1,785 is approximately 26 percent below the non-listed peak of ₹2,400 observed in June 2025. Additionally, pre-IPO shareholders face a six-month lock-in period post-listing, which may reduce their willingness to participate further.'

Tiwari emphasized that for new investors, a lower IPO price might not appear attractive. Instead, it might suggest that the previous non-listed valuation was too high. The grey market also shows limited enthusiasm, as the GMP fell to only 4-5 percent above the upper price band. Tiwari also drew attention to NSE's revenue trajectory, its valuation, and its exposure to the derivatives market as factors investors might consider.

He added: 'NSE's financial performance is also a cause for concern. Net profit for FY26 decreased to ₹10,302 crore from ₹12,188 crore, and EBITDA operating margin fell to 66.9 percent from 73.8 percent. At a P/E of 42 times earnings, the valuation remains high, especially considering that NSE's share in industry option premiums decreased from 78.6 percent to 68.5 percent.'

Since the IPO is entirely an Offer for Sale, and other large IPOs may enter the market, retail investors might prefer to wait, as retail demand in India is largely driven by trading aimed at listing gains, and a 3 percent cushion does not justify locking up funds. He concluded: 'Once the valuation and pricing become clearer, we may see retail participation in the long term, as the fundamentals are strong, like any other large-cap stock.'

According to sources familiar with the situation, the much-awaited Initial Public Offering (IPO) of the National Stock Exchange (NSE) is expected to be priced around ₹1700–₹1800 per share.

Sources added that the size of the Offer for Sale (OFS) may be reduced from the initially planned 6 percent to 5.25 percent, which will lead to a lower overall offering volume compared to the previously projected ₹30,000 crore.

The pricing for the exchange's IPO, which will consist solely of OFS, is expected to be announced next week, and the offering itself is likely to commence later in the same week. Shares may be listed on BSE on September 25.

In the over-the-counter market, NSE shares were trading at approximately ₹2025 per unit, according to UnlistedZone data. As of Wednesday, the premium in the grey market was about ₹228.

The exchange plans to file an updated draft prospectus early next week. Sources also noted that the expected price range reflects the reaction of institutional investors during the roadshow.

One source stated that a more attractive offer was made regarding the pricing for small investors participating in the OFS.

The exchange filed its preliminary documents with the Securities and Exchange Board of India (Sebi) in June and received regulatory approval for the Draft Red Herring Prospectus (DRHP) on September 4. Earlier this month, the Supreme Court allowed Sebi appeals regarding joint listing and dark fiber following a settlement in which NSE paid approximately ₹1,491.21 crore.

A source familiar with the developments explained the reduction in offering volume by stating that some shareholders do not wish to sell now under OFS, as they believe they can achieve a higher price after listing.

Significant information has emerged regarding the Initial Public Offering (IPO) of the National Stock Exchange (NSE). According to sources, this IPO is expected to raise approximately 30,000 crore rupees and may commence on September 18th, with the stock listing scheduled for September 25th.

If the offering size reaches approximately 30,000 crore rupees, it could become the largest IPO in Indian history. However, official confirmation of these dates from the NSE has not yet been received, and the full IPO schedule has not been announced.

Sources suggest that the IPO price band might be announced on September 15th. Following this, the book-building process for anchor investors is expected to open on September 17th. Subsequently, the public subscription may open from September 18th to September 22nd, allowing investors to apply on September 18th, 21st, and 22nd.

The projected size of the NSE IPO is around 30,000 crore rupees. If this size is maintained, it will surpass the Hyundai Motor India IPO held in 2024, which raised 27,870 crore rupees, potentially making it the largest IPO in India. Due to this large volume, increased interest is anticipated from both domestic and foreign investors.

It is expected that the NSE IPO will be structured entirely as an Offer For Sale (OFS). This means the company itself will not issue new shares; instead, existing shareholders will sell a portion of their stake. Under the OFS, approximately 14.89 million equity shares with a face value of 1 rupee may be offered, constituting about 6% of NSE's paid-up capital.

Since the IPO will be conducted entirely through the OFS mechanism, no new shares will be issued, and the IPO proceeds will not go directly to the NSE. These funds will be received by the existing shareholders selling their stake. Reports also indicate that Bank of Baroda may sell its stake in the NSE IPO. The bank is expected to sell about 7.69 million NSE shares it holds under the OFS. According to reports, Bank of Baroda might realize about 35% of its stake in NSE, although the final number of shares and the stake will only be confirmed by official documents.

Considering the current probable timeline, the following dates may be significant for investors: September 15th—possible announcement of the price band; September 17th—possible opening of the book for anchor investors; September 18th, 21st, and 22nd—possible subscription dates; and September 25th—possible stock listing.

Nevertheless, investors should remember that all these dates are tentative. Final timelines will only become clear after the official schedule is published by the NSE. A clearer picture of the offer valuation, share volume, and the actual situation for investors can be seen after the price band and related IPO documents are released.