NSE IPO: Why SBI is selling fewer shares despite strong buzz around listing
The much-awaited National Stock Exchange (NSE) IPO is finally here, with the issue set to open on September 17. The price band has been fixed at Rs 1,700-1,785 per share.
But while the IPO has created a buzz in the market, the shareholders selling their shares have decided to reduce the number of shares they will offload. The offer-for-sale (OFS) is now expected to raise around Rs 22,562 crore, compared with the nearly Rs 30,000 crore initially expected.
So, why are existing shareholders selling fewer shares when the IPO is expected to see strong demand and potentially a positive listing?SBI, GIC AND BANK OF BARODA CUT STAKE SALES
The selling shareholders are now expected to offer around 126 million shares in the OFS, down from nearly 149 million shares mentioned in the original offer documents released in June.
State Bank of India (SBI) has reduced its stake sale from 1% to around 0.7%. It is expected to receive up to Rs 2,851 crore from the IPO.
At the same time, SBI Capital Markets has been added as a selling shareholder in the updated offer documents. The SBI subsidiary will sell around 0.35% of its stake, which could fetch about Rs 1,567 crore.
Both SBI and SBI Capital Markets had acquired their NSE shares at a weighted average cost of less than Rs 1. This means they are selling the shares at around 17-18 times their acquisition price.
The General Insurance Corporation of India (GIC) has also reduced its stake sale by 18 basis points. It could now earn up to Rs 1,104 crore from the issue. Bank of Baroda has cut its stake sale by 13 basis points and could receive around Rs 1,373 crore.WHY ARE SHAREHOLDERS HOLDING BACK?
The decision appears to be linked to the IPO valuation.
Market participants had earlier expected NSE to price its shares at around Rs 2,000-2,100 apiece, which would have valued the exchange at more than Rs 5 lakh crore.
However, the price band of Rs 1,700-1,785 values NSE at around Rs 4.42 lakh crore. While this lower valuation is positive for new investors, it means existing shareholders would receive less money from selling their shares now.
“With the price band that we eventually saw, it made sense for the shareholders to hold onto their shares for the future,” an analyst tracking the IPO said.
The analyst added that the IPO is expected to list positively and could deliver good returns over time. The lower valuation leaves some room for the stock to rise, making it attractive for existing shareholders to retain some of their shares rather than sell them all at the IPO price.NSE'S MARKET DOMINANCE COULD SUPPORT FUTURE GAINS
The performance of BSE after its 2017 listing is another reason shareholders may be willing to wait. BSE shares have gained around 29 times since listing.
SBI, for instance, would have earned around Rs 4,418 crore if it had gone ahead with its original stake sale. But if NSE's share price rises to Rs 3,000 in the coming months or years, the value of its remaining investment could increase significantly.
NSE also has a strong position across India's financial markets. According to Motilal Oswal data, it commands around 93% of the cash market, 99.79% of equity futures and 74.71% of equity options. Its share of the currency derivatives market is around 99-100%.
NSE has also expanded beyond its traditional equity and derivatives businesses into areas such as commodities, real estate investment trusts (REITs) and infrastructure investment trusts (InvITs). It continues to hold a leading position across several of these segments.
For existing shareholders, therefore, reducing the stake sale may be less about giving up immediate gains and more about keeping a larger share of a potentially valuable investment for the future.- EndsPublished By: Jasmine anandPublished On: Sep 14, 2026 12:34 IST
