NSE files UDRHP; IPO issue size shrinks as PSU insurers pare stake sale: Sources

Fresh updates from the financial markets indicate that The National Stock Exchange (NSE) on Wednesday filed its updated draft red herring prospectus (UDRHP) with SEBI and the bourses, with the proposed IPO size set to shrink as public-sector insurance firms and Morgan Stanley reduced the number of shares they plan to sell through the offer-for-sale (OFS), sources stated.

The offering size is now likely to be around Rs 23,000 crore, compared with the roughly Rs 30,000 crore offering envisaged when NSE filed its original DRHP in June.

The IPO will keep be entirely an OFS, with existing shareholders selling their shares and NSE not receiving any proceeds from the offering. The original DRHP proposed the sale of 14.89 crore shares, equivalent to around 6 percent of NSE's equity.

Sources stated that some of the PSU insurers participating in the IPO have reduced their proposed stake sale. In the original DRHP, General Insurance Corporation of India (GIC Re) had offered up to 1.066 crore shares, while New India Assurance had proposed to sell 1.05 crore shares. National Insurance Firm and United India Insurance Firm had each proposed to sell 60 lakh shares. The four insurers had as a result proposed to collectively sell around 3.37 crore NSE shares.

Separately, sources stated MS Strategic (Mauritius) Ltd, an entity linked to Morgan Stanley, has additionally reduced the number of shares it plans to offer. The original DRHP had provided for MS Strategic to sell 1.60 crore shares.

The reduction in the OFS comes despite firm investor interest in the proposed stock-exchange debut. Sources stated the institutional book has noted interest of around Rs 85,000 crore, underscoring firm demand from large market participants.

The NSE filing is a key step towards the exchange's long-awaited stock-exchange debut, nearly a decade after it first began the IPO process.