Demand for anchor book exceeds expectations: NSE MD and CEO Ashishkumar Chauhan

Representational Image. File pic.

Demand for the National Stock Exchange's (NSE) anchor book has been much higher than expected ahead of the exchange's Rs 22,569-crore IPO, Managing Director and CEO Ashishkumar Chauhan said on Tuesday, signalling strong institutional appetite for the mega issue.

"Anchor book is pretty large, much more than we thought it would be," Chauhan told reporters here.
The bidding for anchor investors will take place on September 16.

According to people familiar with the matter, investment majors, including Goldman Sachs Asset Management, Franklin Templeton and Fidelity International were among the early investors showing interest in the anchor book.

Also, Norges Bank Investment Management, Abu Dhabi Investment Authority and GIC are likely to participate in the anchor book bidding, they said.

The anchor book is expected to be around Rs 6,250 crore, lower than the earlier estimated Rs 9,000 crore, with the final investor line-up still being worked out, Chauhan said.

He said the NSE has to distribute shares among various categories of institutional investors under the applicable reservation framework, including domestic mutual funds, other institutions and foreign investors.

The much-awaited Rs 22,569-crore IPO, entirely an offer for sale (OFS), is set to become the country's second-largest public issue after Hyundai Motor India's Rs 27,870-crore offering in 2024.

Chauhan said different categories, including domestic mutual funds and other institutions as well as foreign investors, have specified allocation requirements, making the available shares particularly constrained for an IPO of this scale.

On the possibility of NSE creating a permitted-to-trade category for its shares, Chauhan said the exchange has not applied for it so far and would consult the Securities and Exchange Board of India (Sebi) if it decides to go for the option.

Asked about the minimum public shareholding requirements, Chauhan said NSE would have 100 per cent free float after listing, given its large shareholder base of 2 lakh.

The exchange could eventually see stronger demand once its shares become eligible for inclusion in domestic and international indices, noting that the large free float would give NSE a different profile compared with companies having lower public float.

Chauhan also said the growth in market volumes would depend partly on broader market conditions. He noted that Indian markets had remained relatively sideways over the last two-three years, while geopolitical developments and changes in the global environment had also affected trading activity.

"Sideways markets don't trade that much vis-a-vis bullish markets," he said, adding that a clearer global environment could lead to higher transaction volumes and changes in the way indices perform.

The NSE's IPO is scheduled to open for public subscription on September 17 and close on September 21, with the price band of Rs 1,700 to Rs 1,785 per share. Shares of the company are expected to list on September 24.
At the top end of the price band, the exchange will be valued around Rs 4.42 lakh crore.

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