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NSE Says Investors To Pare Stakes In IPO, No Sale Of New Shares

NSE said in June it would file for a domestic IPO by January
NSE said in June it would file for a domestic IPO by January

Mumbai: National Stock Exchange Ltd (NSE), the country's biggest bourse, said on Thursday that a planned initial public offering (IPO) will consist of stake sales by existing investors, without the sale of new shares.

The exchange's board also approved plans to issue free shares and a split of its stock, and plans to complete both processes by December 15.

NSE said in June it would file for a domestic IPO by January, giving existing shareholders an exit opportunity after some foreign investors accused the exchange of dragging its feet on a listing.

It has named four banks, including Citigroup and Morgan Stanley, to manage its listing. Bankers expect the IPO to be launched in the second quarter of 2017.

A stock-split ahead of the IPO should help it price the shares more attractively for retail investors.

Under the plan approved by the NSE board on Thursday, its existing shareholders will get one bonus share for every 10 shares held. Subsequently, each stock with a face value of Rs 10 will be split into 10 shares of Rs 1 each, according to a statement from the exchange.

The exchange said after the stock split, its total number of subscribed equity shares will jump ten-fold to 495 million.

NSE's smaller rival BSE Sensex, which last month filed for an IPO, is also not selling any new shares. Instead, its investors including Singapore Exchange will be selling up to 29.96 million shares, or a 27.9 per cent stake, in the IPO.

© Thomson Reuters 2016