Kavitha Murali

One of the wildest "what could have been" story for India’s venture capital industry.. That’s because back in 2009, three venture firms - Elevation Capital (then SAIF Partners), Tiger Global and Norwest Venture Partners - collectively held about 10% stake in NSE. But when NSE lists on September 24 at Rs 4.42 lakh crore ($46 billion) valuation, these firms won’t be seen prominently on its cap table in what is India's second largest IPO. The three firms had all picked up the stake at a valuation of around Rs 10,000-15,000 crore ($1-1.6 billion as per exchange rates now) for NSE. This would have meant over 40 times returns by now, and an outcome collectively worth over Rs 40,000 crore or about $4.5 billion at the IPO. While SAIF had picked up the largest stake (5%) in 2007, Tiger (3%) and Norwest (2%) picked up post financial crisis in 2009. But then came the long wait for an IPO. By late 2015 and early 2016, foreign investors sent formal notices to the NSE board saying that the management was "dragging its feet" on its listing. NSE management was resisting because law required it to cross-list on a rival exchange (like the BSE), exposing them to a competitor's regulation. By December 2016, NSE filed for an IPO at Rs 45,000 crore valuation. But it was shelved after the co-location data-access scandal triggered years of SEBI show-cause notices and the governance saga around former CEO Chitra Ramkrishna. The plans for listing stayed frozen. Rather than wait it out, most of these investors started selling down gradually from 2018-19 given the typical venture fund life is 10-12 years. By 2023, they sold off their shares in tranches, when the peak grey-market valuation for NSE was roughly Rs 1.9 lakh crore ($20 billion). This would mean that they would have made about 8x to 16x returns for all these investors - which are still good returns. But not close to over 40x they would have made through the IPO if they still held stake, given the valuation surge over the last few years. Tiger Global is the exception among the three, as it still holds 0.64% stake after partially exiting most of its holding over the years. It is not selling in the IPO. This unsold stake is worth Rs 2,830 crore ($300 million) at the IPO price.