NSE IPO a landmark for primary market, retail investors remain its backbone: Haldea

The proposed initial public offering of the National Stock Exchange is a landmark moment for India's primary capital market, according to Pranav Haldea, Managing Director of Prime Database, who described the listing as one that investors have awaited for a long time.

Speaking on the implications for the wider market infrastructure space, Haldea said the valuation of NSE shares is already reflected in the unlisted market and has been factored into how other market infrastructure institutions are priced. He said he does not expect the IPO by itself to trigger a significant re-rating across the sector, and that another stock exchange would be the most direct point of comparison when assessing its impact.

On the broader market, Haldea said domestic investors have continued to lend strong support to Indian equities through geopolitical uncertainty, bouts of volatility and foreign portfolio investor outflows. Retail participation, particularly through systematic investment plans into mutual funds, has become a central pillar of the market, he said, describing Indian retail investors as steadfast supporters of equities over the past couple of years.

According to Haldea, the cushion provided by domestic flows has changed how the market absorbs foreign selling. In earlier periods, large FPI exits would have driven deeper corrections, but strong local inflows have helped steady the market. Mutual fund SIPs have made these investors significant buyers in both the secondary and primary segments, he noted, even as foreign investors continue to participate in IPOs while trimming secondary-market exposure.

Addressing the debate over whether promoters are using listings mainly to monetise holdings rather than raise fresh capital, Haldea said the quality of the company and the valuation at which it comes to market matter more than whether the issue involves fresh capital or an offer for sale. He said stake sales by promoters and early backers should not automatically be seen as a negative, noting that entrepreneurs take substantial risks and that allowing them to realise part of their investment can encourage future entrepreneurship. The promoter's residual holding after the IPO, he added, is the more important consideration for investors.

Haldea also pointed to the growing role of angel, venture capital and private equity investors in funding companies before they list. These backers help businesses scale, put governance structures in place and reach a level of maturity that prepares them for public markets, which he said gives retail investors greater comfort and signals a maturing capital-market ecosystem. Exits by such investors at the time of an IPO, he added, can be a natural stage in a company's evolution.