(Bloomberg) — National Stock Exchange of India Ltd., the world’s largest derivatives exchange by volume, has downsized its initial public offering, a sign of rising concern over the willingness of investors to buy into the deal at the valuation the firm had been seeking.
The company reduced the number of shares offered to 126.44 million from the 148.9 million planned earlier, according to its red herring prospectus filed in Mumbai late Thursday. The offering will consist entirely of existing shares, with about 5.1% of the company’s equity capital on sale, down from about 6% planned earlier, the filing showed. The offering will take orders from investors from Sept. 17 till Sept. 21, with a potential listing on Sept. 24.
NSE’s valuation has come under growing scrutiny as investors worry about slowing growth and tighter regulatory oversight of stock-market activity. Options trading, a key driver of the exchange’s growth, has come under particular pressure as Indian authorities seek to curb speculative derivatives activity. As a result, the company is now likely to price the IPO at 1,700 rupees to 1,785 rupees a share, below an earlier marketed range of 2,000 rupees to 2,100 rupees, people familiar with the matter have said.
Read: NSE Slashes IPO Ambitions as World’s Biggest Options Boom Fades
At the upper end of the price range, selling shareholders could raise as much as 226 billion rupees ($2.4 billion), below the 278.7 billion rupees raised by Hyundai Motor Co.’s Indian unit in 2024 in the country’s largest-ever IPO. The stock exchange is expected to announce the official price range this week, Bloomberg News reported.
In NSE’s draft paperwork, filed in June, selling shareholders included State Bank of India, General Insurance Corp. of India Ltd. and Canada Pension Plan Investment Board.
Some of the shareholders who have reduced their selling portion include State Bank of India, Morgan Stanley, Bank of Baroda, and General Insurance Corp of India Ltd..
–With assistance from Chiranjivi Chakraborty and Devidutta Tripathy.
(Updates with more details.)
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