Apurva Sheth, Head of Market Perspectives and Research at SAMCO Securities, anticipates that shares of the National Stock Exchange of India Ltd (NSE) could list at a premium ranging from Rs 50 to Rs 80. This projection is contingent on prevailing market conditions when the shares begin trading.
Institutional Demand Expected
Sheth highlighted that various institutional players, including mutual funds, insurance companies, pension funds, and overseas investors, are expected to generate consistent demand for NSE shares in the weeks following the listing. This institutional interest is a key factor supporting his premium forecast.
Long-Term Strategy for Investors
For investors not solely focused on immediate listing gains, Sheth recommends a cautious approach. He advises against selling shares on the listing day and suggests that long-term investors consider a strategy of staggered buying. “If you want to buy NSE for the long term, I would ideally wait for at least a few trading sessions and allow the price to settle,” Sheth stated.
He further elaborated, “Let the stock settle, observe its price action, and if you have a long-term view, consider accumulating gradually rather than trying to time the market.” Sheth also noted that the likelihood of NSE stock falling below its issue price post-listing is relatively low.
IPO Performance and Market Absorption
The NSE IPO, valued at approximately Rs 22,560 crore, saw robust participation, ending with a strong 5.71 times subscription. It attracted bids for 50,58,11,384 shares against 8,86,42,911 shares on offer, making it one of India's most subscribed large IPOs.
Sheth believes the Indian market is well-equipped to absorb potential selling pressure, even if a significant portion of retail investors—who were allocated roughly 35 percent of the issue—decide to sell early. He estimated this potential selling at around Rs 7,700 to Rs 7,900 crore, which he considers manageable for the market.
NSE's Global Standing
If the current grey market premium (GMP) for NSE shares holds, the exchange is poised to become the world's eighth-largest listed exchange by market capitalization, estimated at $47.5 billion. This would place it just behind the London Stock Exchange, valued at $52.5 billion.