The proposed initial public offering (IPO) of the National Stock Exchange (NSE) is expected to unlock significant gains for several state-owned financial institutions, including State Bank of India (SBI), while also highlighting the substantial embedded value of holdings owned by Life Insurance Corporation of India (LIC), according to reports.
As per NSE's draft red herring prospectus (DRHP), SBI plans to divest 2.475 crore shares through the offer for sale (OFS). At an assumed IPO price of around ₹2,000 per share, the stake sale could be worth nearly ₹5,000 crore.
The disclosures reveal that SBI acquired its shares at a weighted average cost of just ₹0.80 per share, underscoring the substantial gains it stands to realise from the listing.
Several other public sector institutions that backed NSE in its early years are also poised to benefit significantly.
LIC, which remains NSE's largest shareholder with a 10.72 per cent stake, is not among the selling shareholders in the proposed IPO. However, its holding is expected to attract investor attention given the potential value unlocked by the listing.
Bank of Baroda, which acquired its shares at a weighted average cost of ₹0.54 apiece, is expected to sell shares worth around ₹2,197 crore at the assumed IPO valuation.
Similarly, Stock Holding Corporation of India Ltd. could monetise holdings worth nearly ₹2,178 crore despite acquiring its stake at an average cost of only ₹0.46 per share.
Among insurance companies, The New India Assurance Company and National Insurance Company acquired their shares at a weighted average cost of ₹0.32 each. At the assumed IPO price, New India Assurance's offered shares would be worth around ₹2,100 crore, while National Insurance Company's stake could fetch nearly ₹1,200 crore.
United India Insurance Company, whose acquisition cost stood at ₹0.50 per share, is also expected to sell shares worth about ₹1,200 crore.
General Insurance Corporation of India, with a weighted average acquisition cost of ₹5.26 per share, is set to monetise shares worth more than ₹2,131 crore.
However, the final valuation will be determined closer to the issue launch.
NSE on Wednesday filed its DRHP with the Securities and Exchange Board of India (SEBI) and the BSE for its long-awaited IPO. The proposed listing will see NSE shares traded on the BSE.
NSE IPO: 10 key highlights investors should know
1. Pure stake sale, no fresh capital for NSE
The IPO consists entirely of an offer-for-sale of up to 14.89 crore equity shares, representing nearly 6 per cent of NSE's paid-up equity capital. Since no fresh shares are being issued, the exchange will not receive any proceeds from the issue. The entire amount raised will go to the selling shareholders. The price band has not yet been announced.
2. Major financial institutions set to dilute holdings
Ten institutional investors will reduce their stakes through the IPO. These include SBI, Canada Pension Plan Investment Board, Bank of Baroda, General Insurance Corporation of India, Stock Holding Corporation of India, National Insurance Company, United India Insurance Company, The New India Assurance Company, MS Strategic (Mauritius) and Aranda Investments (Mauritius). LIC is not participating in the share sale.
3. Institution-owned exchange with no promoter
Unlike most listed Indian companies, NSE operates without an identifiable promoter. Ownership is widely distributed among financial institutions and strategic investors, with no single shareholder exercising controlling influence.
4. Dominant position across India's capital markets
NSE remains India's largest stock exchange across cash equities, equity derivatives and currency derivatives. It has maintained leadership in the equity cash and derivatives segments for over two decades. Globally, NSE is the world's largest equity derivatives exchange by contracts traded and ranks among the leading exchanges by cash equity transaction volumes.
5. Strong revenue base despite regulatory headwinds
The exchange generated revenue from operations of ₹16,601 crore in FY26, reflecting continued growth in trading and market-related activity. Net profit stood at ₹10,302 crore. However, earnings moderated compared to FY25, largely due to SEBI's measures aimed at curbing excessive activity in the equity derivatives market.
6. Consistent dividend payout track record
NSE has maintained a strong dividend distribution history supported by healthy cash flows. The exchange paid a dividend of ₹35 per share in both FY25 and FY26, highlighting its ability to generate substantial free cash while continuing investments in technology and infrastructure.
7. Investor reach expands across India
The number of unique registered investors on the NSE platform surged from around 31 million in March 2020 to over 129 million by March 2026. The exchange now reaches more than 99 per cent of India's PIN codes, reflecting the growing penetration of equity investing across the country. Fund mobilisation through the platform touched ₹20.3 trillion during FY26.
8. Technology backbone handles massive trading volumes
Technology remains central to NSE's operations. The exchange currently processes between 12 billion and 14 billion messages daily and has demonstrated the capacity to manage record trading activity. It has also increased investments in technology infrastructure and is exploring artificial intelligence for market surveillance, compliance monitoring and software development.
9. Diversified business model beyond trading
NSE's ecosystem extends well beyond stock trading. The exchange operates businesses in clearing and settlement, index services, market data, analytics and international trading through its GIFT City platform. It has also received approval to establish a national coal trading exchange and has expanded into commodity-linked products, including electricity futures, strengthening its non-transaction revenue streams.
10. BSE chosen as listing venue
Due to regulatory restrictions on self-listing, NSE's shares will be listed on the BSE. The IPO is being managed by a consortium of 20 book-running lead managers, including Kotak Mahindra Capital, Morgan Stanley, HSBC, SBI Capital Markets, JPMorgan, Citi, ICICI Securities, Axis Capital, JM Financial and HDFC Bank. MUFG Intime India has been appointed as the registrar to the issue.
