NSE IPO will not be of ₹30000 cr? Why reduced OFS could bring down the overall issue size

The National Stock Exchange (NSE) is considering a significant reduction in the size of its initial public offering (IPO), which could impact its overall issue size. According to reports, the proposed dilution of shares by existing shareholders could fall from 6% to 5.2%-5.5%. This reduction in the offer for sale (OFS) component is likely to bring down the overall NSE IPO issue size to ₹ 25,000-27,000 crore, against an earlier estimate of ₹ 30,000 crore. The official process for NSE IPO started last week when Securities and Exchange Board of India (SEBI) gave its approval for the Draft Red Herring Prospectus (DRHP). The NSE IPO is expected to open for subscription on September 18 and conclude on September 22, with a tentative price range of ₹ 1,700-1,785 per share. The listing is likely to conclude before the 'Pitru Paksha' period that starts on September 26. The NSE IPO is the largest in the series of IPOs from the National Stock Exchange and is being floated by the NSE itself. The exchange is looking to make the issue more attractive with pricing being structured to provide greater participation and benefit to small investors in the OFS. This is likely to be India's largest ever public offering, with Hyundai Motor India's IPO currently holding the title of being India's biggest ever IPO with a size of ₹ 27,870 crore. The reduction in OFS is attributed to the existing shareholders' intent to hold for better value. As some shareholders chose not to sell during the IPO, they believe they could command better valuation by selling their stake at a later stage. The NSE IPO price band is likely to fall in the range of ₹ 1,700- 1,785 per share, against an earlier estimate of ₹ 2,000 per share. The NSE IPO is the digital services arm of billionaire Mukesh Ambani-led conglomerate, Reliance Industries. The offering is likely to be estimated to be ₹ 37,700 crore. Several key selling shareholders are participating in the NSE IPO, including Canada Pension Plan Investment Board, Aranda Investments (Mauritius) Pte Limited, Bank of Baroda, Stock Holding Corporation of India Limited, General Insurance Corporation of India, The new India Assurance Company, National Insurance Company and United India Insurance Company. SBI will offload up to 2.48 crore shares, whereas MS Strategic (Mauritius) Limited will offload around 1.6 crore shares. The NSE IPO will be the largest public offering from India, surpassing the ₹ 27,870 crore IPO of Hyundai Motor India.