New Delhi, June 18 -- Singapore state investment firm Temasek, Canada Pension Plan Investment Board (CPPIB) and another Canadian pension fund will generate multibagger returns on their investments in the National Stock Exchange (NSE) as India's largest bourse filed draft documents for a long-awaited initial public offering.

Temasek, which logged a blockbuster exit from India last year when it signed off from Schneider Electric, is looking to offload part of its stake in the NSE after last year divesting a similar stake via a private secondary transaction.

Temasek has offered to sell 11.24 million shares, a tenth of its 4.54% stake, as part of a larger offer for sale of 148 million shares by its shareholders. These include local names like State Bank of India, Bank of Baroda, Stock Holding Corporation, General Insurance Corporation, The New India Assurance, National Insurance Company and United India Insurance. The foreign investors that will take part in the offer for sale include Morgan Stanley, CPPIB, and Ontario Municipal Employees Retirement System (OMERS), apart from Temasek.

The bourse is also backed by several private equity investors including ChrysCapital and TA Associates, and family offices such as Premji Invest, among many others.

The proposed issue is expected to value the NSE around Rs 5 trillion, or around $53 billion at current exchange rates, making it the 11th largest company by market value in India.

The IPO filing comes a decade after the NSE first submitted draft documents for a proposed share sale. But this got entangled in corporate governance lapses at the bourse and it faced a long investigation by the stock market regulator. The NSE has since recovered from that setback.

The sharp correction in global capital markets in the second half of FY26 has pulled back the NSE's fortunes, though. Its total income slid 2.4% to Rs 18,713 crore with net profit declining by more than a sixth to Rs 10,371 crore for the year ended March 31, 2026, after rising 17% and 47%, respectively, the previous year.

Temasek

Temasek invested in the NSE in 2010 when it bought a 5% stake held by NYSE Euronext for $175 million then.

It sought to sell some of this stake when the NSE first filed draft documents for an IPO in 2016 but had to shelve those plans. It did monetize some of its investment last year when it sold a small stake for Rs 1,730 crore ($200 million). It generated nearly 25x on its investment in that deal.

It is likely to churn out more than Rs 2,200 crore in the IPO, logging a multiple on invested capital (MOIC) of 32x.

Temasek is expected to generate a combined internal rate of return (IRR) of nearly 19% in dollar terms and 24% in rupee terms, as per VCCircle estimates. This is much above the 15% and 20% benchmark for private equity-style investors, though as a sovereign investor Temasek would have a relatively conservative threshold. For instance, Temasek's total shareholder return in US dollar terms was 5% and 8% for 10-year and 20-year periods, respectively, according to its 2025 annual review.

Its remaining stake would be worth more than $2.1 billion.

CPPIB, OMERS

CPPIB joined the NSE's cap table when it bought around a 2% stake in 2021 and 2022 for close to Rs 1,600 crore. It took out a bulk of its principal investment via a secondary sale in December 2024.

The pension fund currently owns a 1.6% stake in the NSE. It intends to offload about 11.9 million shares, or a little less than a third of its stake in the bourse, in the IPO and is likely to generate over Rs 2,400 crore.

Coupled with its shares on offer in the IPO, the pension fund is looking at realised annualised returns of around 55% in rupee terms and 48% in dollar terms, as per VCCircle estimates.

OMERS entered the NSE's cap table in October 2020 and bought some more stake in 2021. Overall, it invested about Rs 914 crore. It sold part of its stake via secondary transactions in 2023, mopping up around Rs 910 crore.

After having taken out almost its entire principal investment, the pension fund is now offloading 5.4 million shares in the IPO-or a fifth of its remaining 1.09% stake-and is likely to pocket more than Rs 1,000-1,100 crore. Its balance stake after the IPO would be worth over Rs 4,200 crore. The pension fund is likely to generate an IRR of 45-50% in rupee terms, VCCircle estimates show.

Published by HT Digital Content Services with permission from VC Circle.