Ashish Kumar Chauhan, the MD and CEO of NSE, has cleared the air about the possible listing route and timelines of NSE India IPO. In an interview on ANI, Chauhan highlighted that NSE won’t be able to list on its own exchange and discussed the further timelines of the NSE IPO.
NSE Can’t List On Its Own Platform
Chauhan highlighted that usually other companies list on the National Stock Exchange for investors to trade. Although some global exchanges like the Intercontinental Exchange(ICE), the parent company of the New York Stock Exchange (NYSE), are listed on their own platform. But NSE cannot list on its own exchange due to Indian regulations prohibiting Indian exchanges from prohibiting self-listing.
This was bought to prevent conflict of interest, as the exchange might not monitor its own listing requirements. Chauhan stated to ANI that since NSE cannot list on its own exchange, it will seek listing on other exchanges like the Bombay Stock Exchange (BSE) or another recognised platform.
Chauhan’s Take On NSE IPO Valuation
Chauhan stated that it will be premature to speculate on IPO valuation. He emphasised that pricing decisions are mostly finalised close to IPO launch and are based heavily on market conditions. The merchant bankers appointed by the company usually advise an appropriate price after considering financial performance, industry comparables, growth trends, and broader economic and geopolitical factors.
Regarding the current market volatility, Chauhan said that the current estimates circulating in the public domain should be taken with a ‘pinch of salt’. “NSE's potential valuation of around $50 billion, which market watchers have pegged, according to Chauhan, is speculative.
NSE Not Raising Fresh Capital
The proposed NSE IPO will not involve an issue for raising fresh funding. Instead, this is a planned Offer For Sale (OFS), where the existing shareholders dilute their ownership. Chauhan highlighted that the exchange will invite the current shareholders to offer them whether they want to sell their current shares in the IPO. The proceeds will go to the current shareholders, not the company.
Currently, NSE has 1,95,000 shareholders who collectively own 100% of the exchange."We are not going to raise money for ourselves. We will take shares from our existing shareholders, asking them first if they want to sell in the IPO; this is called an Offer for Sale (OFS). You give it to us. With that, we will go to SEBI, saying that these are the people wanting to sell their shares, and allow us to do an IPO. So we will come out with the prospectus with their shares owned by them and offer it to the public. And then it starts trading, and then everyone can trade, including our existing shareholders and future shareholders. Then that money, which the new IPO shareholders give, goes to the people who are selling," he said.
Chauhan's belief in Public Entity Listing
Chauhan argued that public listing strengthens the transparency and governance of organisations. The market discipline and disclosure norms tend to increase the accountability of the company.
He explained this as “So my fundamental belief is that any public utility, which the NSE is, should be listed, whether it is an electricity utility, a stock market utility or any other utility...And it has been proved beyond doubt that corporate governance improved after LIC (Life Insurance Corporation) was listed. And that is true with, if you see any large organisations, because you have to give out information in real time when material things happen...In real time, investors can figure out, ask questions, and even the media can ask"
Current NSE Unlisted Share Status
Currently, NSE is not listed on any stock exchange, but the NSE Unlisted Shares are traded heavily in the unlisted share market giving substantial returns to investors in the last 5 years. Investors can research purchase unlisted shares before IPO to benefit from early investing opportunities .
