NSE IPO Shrinks as SBI, Bank of Baroda, MS Strategic Trim OFS

NSE IPO Sees Reduced Offer Size Ahead of Market Debut

The National Stock Exchange’s IPO is set to raise less than initially anticipated as key shareholders trim their offer sizes, reflecting a strategic shift in market expectations.

Key Shareholders Trim Offer Sizes

The IPO’s total offer size has been reduced from 148.9 million shares to 126.4 million shares. SBI, the largest selling shareholder, has decreased its planned sale from 24.75 million shares to 15.97 million shares. Additionally, SBI Capital Markets, which joined as a selling shareholder later, will offload 8.78 million shares.

Other significant reductions include MS Strategic (Mauritius), which has cut its proposed sale from 16 million shares to 11 million shares, and Bank of Baroda, which has reduced its offer from 10.99 million shares to 7.69 million shares. This trend of trimming is echoed by other shareholders, including the Stock Holding Corporation of India and the General Insurance Corporation of India, both now offering 6.19 million shares each.

Revised IPO Size and Pricing

The revised IPO is now expected to raise between ₹22,500 crore and ₹23,000 crore, down from the earlier estimated size of ₹30,000 crore. This adjustment reflects a cautious approach by the shareholders, who anticipate that a smaller offer may yield better pricing post-listing.

The price band for the NSE IPO is projected to be between ₹1,700 and ₹1,785 per share. The IPO is expected to open for subscription next week, around September 18, with a listing on the Bombay Stock Exchange (BSE) planned for September 25.

Market Expectations and Grey Market Activity

In the unlisted market, NSE shares are currently trading at approximately ₹1,985 each, indicating a robust demand ahead of the IPO. However, the grey market premium has seen a slight decline, currently standing at ₹213, down from ₹228 a day earlier. This fluctuation suggests that while there is still considerable interest in the IPO, investor sentiment may be adjusting in response to the reduced offer size.

Implications for Investors

The trimming of the offer size by major shareholders could signal a more cautious market environment, where investors are advised to closely monitor the pricing dynamics leading up to the IPO. The adjustments may reflect a strategic decision to optimize post-listing performance, which could be beneficial for long-term investors.

Key Highlights

• The NSE IPO offer size has been reduced from 148.9 million shares to 126.4 million shares.
• SBI’s share sale has decreased from 24.75 million to 15.97 million shares.
• The expected capital raise is now between ₹22,500 crore and ₹23,000 crore.
• The IPO price band is set between ₹1,700 and ₹1,785 per share.
• Shares are trading at around ₹1,985 in the unlisted market, with a grey market premium of ₹213.

Investor Note: Investors should consider the implications of the reduced offer size on pricing and demand dynamics, as well as the potential for better post-listing performance in a cautious market environment.