NSE IPO: The much-awaited initial public offering (IPO) of National Stock Exchange of India (NSE) is moving closer. The proposed issue, which could raise over ₹20,000 crore, is expected to be one of the largest public offerings in India. As per a recent report, the bourse is likely to file its draft red herring prospectus (DRHP) with SEBI in June.

Unlike a typical IPO, where investors can directly apply for shares, this offering follows a different route. The structure and regulatory requirements mean participation is restricted at this stage, making it important for investors to clearly understand how the process works and whether they qualify.

Who is eligible to participate?

The IPO is entirely structured as an offer-for-sale (OFS), which means only existing shareholders can sell their stake, and the company itself will not receive any proceeds from the issue.

To be eligible, shareholders must have held fully paid-up NSE shares continuously since June 15, 2025. This requirement is linked to regulatory norms that mandate a minimum holding period before the filing of the DRHP.

This also means that investors who are considering buying NSE shares now in the unlisted market purely to participate in the IPO will not be eligible. The one-year holding condition effectively prevents last-minute entries, ensuring that only long-term shareholders can participate in the OFS.

Additionally, shares must be fully paid-up and free from any legal or financial restrictions such as pledges, liens, or encumbrances. Any such restriction could disqualify the shares from being tendered in the OFS.

Key deadline and participation process

Eligible shareholders must submit their expressions of interest (EOIs) by April 27, 2026, before 5 PM. This deadline is final, and missing it would mean losing the opportunity to participate in the OFS.

Once EOIs are submitted, the exchange will review and verify them before identifying the eligible shareholders who can participate in the offering. This step is important given the large and diverse shareholder base of NSE.

Investors who qualify can choose to sell either partially or fully through the OFS route. However, there is a key restriction—shareholders who participate in the OFS will not be allowed to apply for shares in the IPO as investors.

The exchange has also reached out to shareholders by sending EOI forms and related documents, indicating that the process is already underway.

IPO Structure and other details

The IPO is expected to involve the sale of around 4% to 4.5% of NSE’s total equity. Since it is an OFS, all proceeds from the sale will go to existing shareholders rather than the company.

The final price of shares will be determined through a book-building process, which means pricing will depend on investor demand and prevailing market conditions at the time of the issue.

For participating shareholders, this introduces a degree of uncertainty, as they will not know the exact exit price at the time of submitting their interest.

Moreover, NSE has appointed 20 merchant bankers—the highest ever for an IPO in India—along with multiple legal advisors and intermediaries.

Key risks and lock-in conditions

One of the key risks for shareholders participating in the OFS is the possibility of partial subscription. If the shares offered are not fully subscribed, the unsold portion will be subject to a six-month lock-in period after listing.

This means investors may not be able to exit immediately and could remain exposed to price fluctuations in the market.

Additionally, all pre-IPO shares (other than those sold in the OFS) will also be locked in for six months from the date of allotment. This further limits liquidity for existing shareholders in the near term.

Disclaimer: This story is for educational purposes only. Please consult with an investment advisor before making any investment decisions.