The National Stock Exchange (NSE), which is the largest bourse of the country, has been planning for its public offering for quite some time. It has been facing much pressure from its shareholders, who have wanted to liquidate their shares for over a decade now.
It wrote to market regulator SEBI seeking permission to once again file for its DRHP. NSE asked SEBI to provide its no-objection so that it could proceed with its initial public offering last month.
The shares of BSE, Central Depository Services, and Multi-Commodity Exchange soared on Monday amidst talk of SEBI granting an in-principle approval for NSE IPO. However, these stocks have been exhibiting some volatility today.
The news of a possible SEBI approval for the NSE public offering pushed BSE shares up by 8%. Shares closed at Rs. 1,260 on Monday, 27 September. MCX surged 4%, closing at Rs. 1,721 while CDSL stocks jumped 5% to touch Rs. 1,331.
However, these stocks are highly volatile today as there might be some announcements from SEBI with regard to NSE IPO. While BSE shares hit an intraday high of Rs. 1,285.75 per share, they dropped to an intraday low of Rs. 1,251 per share on NSE.
MCX shares opened at Rs. 1,737 a share and went to hit an intraday high of Rs. 1,744.35 per share. However, it dropped to Rs. 1,705 a share. Similarly, CDSL stocks opened green today but soon slipped to the red zone.
Notably, NSE’s public offering is one of the most awaited IPOs. The largest stock exchange of India might be one of the most profitable companies with a profit margin of 55%. As of now, unlisted shares of the National Stock Exchange are trading at Rs. 3,300 – 3,500 a share. This puts its valuation at around Rs. 1.75 lakh crores. NSE shares were trading at Rs. 1,750 per share in March as opposed to Rs. 900- 1000 in September 2020.
NSE had already filed for its DRHP in December 2016, asking to float its IPO of Rs. 10,000 crores. SEBI, however, returned its offer document in February 2019. The market regulator stated that any reduction in the number of shares that are offered for sale by above 50% would require a fresh filing.
In 2015, a whistleblower wrote to SEBI informing of NSE’s alleged preferential access to certain traders and brokers on the trading platform. Consequently, SEBI ordered the stock exchange to carry out a forensic audit of its systems. It found out that NSE’s system could be manipulated.
SEBI banned NSE from accessing the securities market for 6 months as a penalty for the co-location issue.
The National Stock Exchange includes some of the notable names in its list of investors and stakeholders. Life Insurance Corporation of India is the largest investor with a 10.71% stake as of 31 March 2021.
Veracity Investments and Aranda Investments hold a 5% stake each in NSE. Moreover, Stock Holding Corporation and SBI Capital Market own 4.44% and 4.33% stake, respectively.
According to Ravi Singhal, Vice Chairman of GCL Securities, irrespective of the outcome of the SEBI meeting today, BSE and MCX stocks will remain strong buy for investors.
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DMart owner Radhakishan Damani holds a 1.58% stake in NSE, which was picked up last year.
NSE is yet to receive a green signal from market regulator SEBI. Once received, NSE will finalise all relevant details regarding its public offering.
NSE reported revenue of Rs. 6,202 crores for the period ending 31 March 2021, which is a 59% jump as compared to the prior-year period.
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