LIC likely to sell part of NSE holding through IPO: Sources

NSE IPO Updates: Life Insurance Corporation of India (LIC) is planning to pare its stake in the National Stock Exchange (NSE) through the bourse’s much-anticipated initial public offering (IPO), according to sources familiar with the matter.

Zee Business sources said LIC, which holds a 10.72 per cent stake in NSE, is considering selling a part of its shareholding as and when the exchange comes out with its IPO. A final decision on the quantum and timing of the stake sale is expected to be taken shortly.

The move is in line with LIC’s larger strategy of monetising investments and deriving value from long-held strategic stakes. The proposed divestment is likely to be routed through the NSE IPO rather than a separate secondary transaction, sources indicated.

Investors await NSE IPO

The National Stock Exchange, India’s largest equity derivatives exchange, is expected to launch its IPO in the next six to seven months, subject to regulatory approvals. Investors have been waiting for the listing of NSE for quite sometime now, as the exchange has a sound financial profile, dominant market share and good profitability.

LIC is among the largest non-promoter shareholders in NSE, and any decision to pare its stake is likely to attract significant investor interest, given the scale and visibility of the IPO. The stake sale would also help improve liquidity in LIC’s investment portfolio.

Neither LIC nor NSE has made an official announcement on the proposed stake sale so far. However, the development comes at a time when the government and state-owned institutions are increasingly looking to monetise assets through market listings and strategic disinvestments.

The NSE IPO is expected to be one of the largest listings in India’s capital markets, with participation from several existing shareholders looking to partially exit their investments.

SEBI has granted a no-objection certificate (NOC) to the National Stock Exchange for its proposed initial public offering, according to Zee Business managing editor Anil Singhvi. The clearance enables the exchange to move ahead with the next formal steps in the listing process.

Sources cited by Singhvi said NSE is expected to file its draft red herring prospectus (DRHP) by the end of April or early May. Following the DRHP submission, the market regulator will scrutinise the document before granting its final approval for the public issue.

The NSE IPO is likely to be structured largely as an offer-for-sale, with existing shareholders expected to pare their holdings through the issue. Several institutional investors and banks that invested in the exchange during its early years are seen using the IPO as an exit route. Any fresh capital raising by NSE is expected to be limited.

NSE has been pursuing a public listing since 2016–17, but the plan was put on hold after regulatory action linked to the co-location case. The issue remained unresolved for several years, and the exchange did not secure approval even under the previous SEBI leadership, despite multiple attempts.

The impasse was cleared after NSE settled the co-location matter by paying Rs 1,388 crore, removing the key regulatory obstacle that had delayed the listing for nearly a decade.