Mumbai: Shares of market intermediaries BSE, Multi-Commodity Exchange, and Central Depository Services rallied on Monday amid talk that the Securities and Exchange Board of India (Sebi) is likely to give the National Stock Exchange (NSE) its in-principle nod for an initial public offering.
BSE shares gained 8% to close at Rs 1,260,
shares were locked at the 5% upper circuit at Rs 1,331. gained 4% to close at Rs 1,721.
Last month, NSE wrote to the capital markets regulator seeking its approval to file its draft prospectus (DRHP) to launch an IPO. Sebi and NSE did not respond to ET’s queries.
Unlisted shares of NSE are currently trading at Rs 3,300-3,500 per share, valuing the exchange at nearly Rs 1.75 lakh crore. The shares traded at Rs 1,750 apiece in March as against Rs 900-1,000 in September last year.
NSE’s issue is one of the most awaited IPOs in the past decade. The country’s largest stock exchange could be one of the most profitable companies with a 55% profit margin.
NSE reported revenue of Rs 6,202 crore for the year ended March 31, 2021, a 59% jump over a similar period the previous year. Net profit has increased by 55% to Rs 3,403 crore. About 80% of the exchange’s revenue has been generated from the trading services business, which has seen a growth of 77% in FY21.
In December 2016, NSE filed its prospectus with Sebi for an IPO of Rs 10,000 crore. However, in February 2019, the regulator returned the offer document on the grounds any decrease in the number of shares offered for sale by more than 50% would require a fresh filing.
In April 2019, Sebi barred NSE from accessing the securities market for six months in the co-location case. The co-location case dates back to 2015 when a whistleblower wrote a letter to Sebi alleging that the NSE gave preferential access to a few high-frequency traders and brokers to the exchange’s trading platform.
In 2016, Sebi ordered NSE to conduct a forensic audit of its systems and found that they could be manipulated.
Life Insurance Corporation, the biggest investor in the exchange, held a 10.71% stake as of March 31, 2021. Aranda Investments and Veracity Investments held 5% each, while SBI Capital Market and Stock Holding Corporation own 4.33% and 4.44% stake respectively.
Billionaire investor and founder of supermarket chain DMart Radhakishan Damani picked up a 1.58% stake in the bourse last year.