NSE IPO lets Narayana Murthy, Azim Premji, others reap almost Rs 30,000 cr in riches

According to fresh market updates, As the National Stock Exchange (NSE) heads towards one of India's biggest-ever equity market debuts, several of its long-standing market participants are choosing to hold on to their stakes rather than sell into the landmark stock-exchange debut.

Two of the biggest names set to benefit are IT stalwarts Infosys' Narayana Murthy and Wipro's Azim Premji.

Premji's family office, Premji Invest, and Murthy's family office, Catamaran, Radhakishan Damani and several other marquee market participants are retaining their NSE holdings, which are collectively worth almost Rs 30,000 crore at the IPO's upper price range.

At the upper end of the price range, at Rs 1,785 a share, the holdings covered in this analysis are roughly worth a cumulative Rs 29,400 crore. The group includes private investment firms, family offices and prominent individual market participants, several of whom are not selling any shares in the IPO.

Notably, NSE's Rs 22,561 crore initial public offering is entirely an offer for sale of 12.64 crore shares. The National Stock Exchange itself will not receive any proceeds from the offering, with the money going to existing shareholders who are selling their holdings.

At the upper end of the price range, the exchange is valued at around Rs 4.42 lakh crore.

Premji Invest is the largest private investment name in the group. PI Opportunities Fund I, its holding vehicle, owns 5.82 crore shares in the National Stock Exchange. At Rs 1,785 apiece, the stake is worth Rs 10,231.6 crore. The fund is not selling shares in the IPO.

Radhakishan Damani, founder of Avenue Supermarts, which operates DMart, owns 3.9 crore shares in the National Stock Exchange. His holding is worth Rs 6,856 crore at the IPO price, and he is retaining the entire stake.

360 ONE, through its various investment vehicles, holds around 4 crore shares, translating into a combined value of around Rs 7,139.3 crore at Rs 1,785 per share.

Tiger Global, through its investment vehicle, holds 56 lakh shares, worth Rs 999.6 crore at the IPO price.

The shareholder list additionally includes Catamaran, the investment firm associated with Infosys founder N R Narayana Murthy. Catamaran owns 38.5 lakh shares in NSE worth Rs 687 crore.

Together, these four holdings account for around Rs 25,913 crore of the Rs 29,400 crore aggregate.

The shareholder list additionally includes several prominent business and market names.

Sunil Kant Munjal, chairman of Hero Enterprise, holds 1.02 crore shares, worth around Rs 1,821.2 crore at the IPO price.

Kris Gopalakrishnan, co-founder of Infosys, holds 94.29 lakh shares, worth roughly Rs 1,683 crore.

Other prominent individual market participants include Siddharth Balachandran, Vanaja Sundar Iyer, Siddharth Iyer, Lata Bhanshali, Bharat Taparia, Ignatius Navil Noronha, Dolly Khanna, Raamdeo Agrawal and Motilal Oswal.

NSE first filed its IPO papers with Sebi in December 2016, but the stock-exchange debut kept getting pushed out amid the co-location controversy and related regulatory proceedings. The prolonged delay meant several early market participants did not wait around for the eventual public-market debut.

Citigroup, Goldman Sachs and Norwest Venture Partners had exited their NSE holdings by FY22, while Elevation Capital, then SAIF Partners, additionally began cashing out. Elevation sold NSE shares worth Rs 580.46 crore in the January-March 2023 quarter, after holding the exchange since 2007.

For those market participants, the opportunity to monetise came years before NSE finally touched the IPO stage. In the meantime, market participants that stayed through the long wait are now sitting on substantial paper wealth as the exchange heads for its stock-exchange debut.

The decision to hold is not universal among the National Stock Exchange's large shareholders.

Several institutional and private market participants are selling part of their holdings through the IPO while retaining substantial stakes.

Aranda Investments, owned by Singapore's Temasek Holdings, held 11.25 crore shares before the offer and is selling around 1.12 crore shares. It will retain roughly 10.12 crore shares, worth around Rs 18,064 crore at the IPO price.

Mahagony will retain around 8.93 crore shares, worth roughly Rs 15,940 crore, after selling part of its position.

Crown Capital will retain around 4.55 crore shares, worth approximately Rs 8,122 crore, while TA Asia Pacific Acquisitions will retain around 3.23 crore shares, worth roughly Rs 5,766 crore.

MS Strategic, an investment vehicle associated with Morgan Stanley, will retain around 1.88 crore shares, worth around Rs 3,356 crore, after selling 1.1 crore shares.

To be sure, the value of stakes being retained by shareholders who are selling a portion of their holdings through the IPO is not included in the roughly Rs 29,400 crore tally above.

The pattern highlights the different approaches among the exchange's long-standing shareholders. Some are using the IPO to monetise part of their investments, while others are carrying their holdings into the listed market.

The National Stock Exchange's IPO is the culmination of a decade-long wait for the country's largest exchange to enter the listed market. The offering closed on September 21 after receiving bids for more than 50 crore shares against 8.86 crore shares on offer. It was subscribed 5.71 times, with the qualified institutional buyer portion subscribed 12.68 times.

The shares are scheduled to list on September 24. At Rs 1,785, the IPO values the exchange at around Rs 4.42 lakh crore, making it one of India's largest public offerings and giving its long-standing shareholders a liquid market in which to eventually monetise their holdings.