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NSE hires Citigroup, three others for IPO

23 August, 2016

National Stock Exchange of India Ltd (NSE) has moved a step closer to going public after it appointed four bankers to manage its proposed initial public offering.

Citigroup Global Markets India Pvt. Ltd, JM Financial Institutional Securities Ltd, Kotak Mahindra Capital Company Ltd and Morgan Stanley India Company Pvt. Ltd will manage the issue, India’s largest stock exchange said in a statement on Tuesday. The NSE may appoint more banks for additional roles if required, it said.

The stock exchange also named law firm Cyril Amarchand Mangaldas as the legal adviser for the IPO. Besides, its board approved the appointment of Price Waterhouse & Co as joint statutory auditors for 2016-17 along with the current statutory auditors and as sole statutory auditors for the financial years 2017-21.

The NSE said it expects the listing process to gain momentum with these steps and that it is committed to listing its shares as soon as possible.

The bourse had said in June it planned to file a draft red herring prospectus by January 2017 to list its shares on domestic bourses and file for an overseas listing by April 2017.

The NSE joins cross-town rival BSE Ltd, operator of Asia’s oldest stock exchange, in planning an IPO. The BSE said in May it planned to sell a 30% stake through an IPO that would comprise an offer for sale by existing shareholders and might include a fresh sale of shares. The BSE received in-principle regulatory approval for the IPO in March. India currently has only one listed bourse, Multi Commodity Exchange of India Ltd, which floated its IPO in 2012.

Unlike the BSE, the NSE hasn’t specified whether the IPO would comprise only a fresh share issue or an offer of sale by existing shareholders or a combination of the two. It also hasn’t said how much money it planned to raise via the offering and the valuation it might seek.

The NSE was valued at Rs 18,220 crore ($2.7 billion) in a transaction where State Bank of India pared its holding in the bourse. SBI holds a 5.19% stake in the NSE while its subsidiary SBI Capital Markets Ltd holds 4.33% of the firm.

The NSE, which was set up in 1992, had been under pressure from some institutional investors to float an IPO to provide them an exit option for quite some time. The exchange’s foreign shareholders include investment banking giant Goldman Sachs, Singapore state investment firm Temasek, private equity firm General Atlantic and venture capital firm SAIF Partners, who each hold a 5% stake. Hedge fund Tiger Global and VC firm Norwest Venture Partners are the other investors.

The NSE’s single-biggest shareholder is state-run Life Insurance Corporation, which holds a 12.51% stake in the bourse. Overall, state-run insurers together own nearly one-fifth of the exchange.

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NSE hires Citigroup, three others for IPO

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