Shares of IFCI sharply rallied 20% to hit a fresh record high on Friday, with the stock being on track to record its biggest single-day surge in nearly two years, amid rising expectations of the National Stock Exchange (NSE) soon filing its draft IPO papers with market regulator SEBI.

IFCI shares hit a new 52-week high of Rs 84.57 apiece as they remained locked in the 20% upper circuit. The sharp gains today added nearly Rs 3,800 crore to the total market capitalisation of IFCI, pulling it up to nearly Rs 22,786 crore.

The rally came as IFCI owns a 52.86% stake in Stock Holding Corporation of India (SHCIL), which, in turn, holds 4.4% of NSE as of the December quarter. Through its controlling interest in SHCIL, IFCI enjoys indirect exposure to NSE, making its stock particularly sensitive to developments related to the exchange’s IPO.

The National Stock Exchange is likely to file its draft red herring prospectus (DRHP) for its maiden public issue next week, as per media reports. NSE, along with Reliance Industries’ Jio Platforms, are likely to file their respective IPO papers with SEBI next week, Business Standard reported citing people familiar with the matter. A person familiar with the matter earlier last month told The Economic Times that NSE is looking to file the papers between June 5 and June 15.

Also read: NSE could file IPO papers with Sebi in early June

The proposed listing of NSE is expected to be one of the largest share sales in India’s capital markets. Once completed, the IPO will provide an exit opportunity for several long-standing institutional shareholders and mark a significant milestone for the country's leading stock exchange.

SEBI early this year had granted a no-objection certificate (NOC) for the long-awaited IPO of the National Stock Exchange (NSE). This regulatory clearance removes a major hurdle for NSE’s listing and has a direct bearing on IFCI due to its indirect stake in the exchange.

Also read: Can buying NSE's unlisted shares now make you good money?

IFCI shares have gained more than 6% in one week and 38% in one month. The shares of the company have jumped over 59% YTD and 36% in one year.

In the longer term, the stock delivered 582% returns over three years and 517% over five years.

Also read: Why is market rallying today?