Sebi’s high-powered advisory committee (HPAC) on settlements and compounding has ‘green-lighted’ the Rs1,387 crore settlement offer made by the NSE to close the long-pending co-location case.
With this, the exchange has crossed a major hurdle for completing its decade-old IPO plan, according to sources.
Now the last two hurdles are the approval from the two-member panel of Sebi whole-time members who have the final word on settlements, and a legal imprimatur on the same from Supreme Court as the matter has been pending there since 2023.
According to a source in the know of the development, the approval from the whole-time members is likely very soon. The HPAC had met in the last week of March on the matter.
The NSE had filed the settlement application with the Sebi on June 20, 2025, offering Rs1,387.39 crore to close the long-pending matter.
However, the source told TNIE on Tuesday that the top Sebi panel has recommended a higher settlement amount at around Rs1,880 crore for resolving the co-location and dark fibre cases. Of this, nearly `1,200 crore is likely to towards disgorgement, about Rs380 crore in interest, with the remaining towards other settlements.
The co-location and dark fibre cases are about allegations that some brokers had received preferential, faster access to market data directly from the servers at the NSE headquarters, giving them an unfair trading advantage. A whistle-blower complaint in 2015 claimed select entities gained early access to NSE’s live market data feed through specific server connections and some unauthorised vendors, raising concerns over market fairness, governance lapses, and violation of Sebi norms.
Following this, Sebi penalised NSE, which was challenged at the SAT and the tribunal had given major relief to the exchange in 2023, by reducing Sebi’s disgorgement amount to just Rs100 crore from Rs624.9 crore saying the NSE can’t be accused of fraud but only of human error, and thus the Sebi penalty was too harsh.
In the dark fibre matter also, SAT had set aside the Rs62.58 crore disgorgement order and another Rs7 crore penalty, in 2023.
Sebi challenged both the SAT orders in the apex court, where the matters are pending since 2023. In an interim order in March 2023 the apex court had asked Sebi to refund Rs 300 crore of the Rs 944-crore NSE paid to the regulator.
In the governance matter, the exchange had withdrawn its appeals and paid Rs 1 crore penalty to Sebi in July 2024.
The col0cation settlement will mark a key milestone for NSE, bringing closure to a legacy matter that has lingered for nearly a decade and prevented its IPO, which is likely to be upwards of Rs 23,000 crore given the grey market price of its stock which makes it the most valuable unlisted company in the country.
The source further said HPAC has already sent its recommendation to the final approval from the panel of two whole-time members, who have the final word on settlements. After their approval, the demand for the settlement amount will be issued to the NSE.
If the WTM panel greenlights settlement application, the Sebi and the NSE will have to move an application to withdraw the case from the apex court. If the top court allows this, the matter will be closed.