CHENNAI: India’s capital markets are set for a long-awaited milestone, with the National Stock Exchange (NSE) moving closer to a public listing after the country’s markets regulator indicated that its clearance for the proposed IPO is likely to be granted by the end of this month. Securities and Exchange Board of India chairman Tuhin Kanta Pandey said at a media meet in Chennai on Saturday that the regulator is in the final stages of issuing a no-objection certificate for the NSE’s initial public offering. This will clear the most important procedural hurdle that has held up the exchange’s listing plans for nearly a decade.
The NSE, which dominates trading in Indian equities and derivatives, first sought to go public in 2016, but its plans were derailed by investigations into alleged preferential access given to some high-frequency traders through its co-location servers. The controversy, often referred to as the dark fibre or co-location case, led to regulatory penalties, management changes and prolonged legal proceedings, all of which kept the IPO on hold even as the exchange continued to grow in scale and profitability.
According to market watchers, Pandey’s comments signal that the regulator now believes the outstanding issues have been sufficiently addressed to allow the listing process to move forward. Once the no-objection certificate is issued, the NSE will be able to submit its draft red herring prospectus, formally kicking off the IPO process. This document will lay out the exchange’s financials, business structure, risk factors and details of the proposed share sale, and will be subject to further regulatory scrutiny before any offer can be opened to investors.
Listing of the NSE is expected to be one of the most closely watched events in India’s capital markets in recent years. As the country’s largest stock exchange, handling the bulk of equity, index and derivatives trading, it is a central piece of India’s financial infrastructure. The exchange already has a large base of institutional and retail shareholders through private transactions, and its shares are actively traded in the unlisted market, where valuations have remained high despite the prolonged delay to the IPO.
The prospect of a listing also has wider implications for market transparency and governance. As a publicly traded company, the NSE would be subject to stricter disclosure requirements and greater investor scrutiny, which many market participants see as a positive step for an institution that plays a pivotal role in price discovery and capital formation in India. For existing shareholders, the IPO would provide long-awaited liquidity, while new investors would get access to a business that benefits directly from the growth of India’s equity markets.
Although the no-objection certificate is expected by the end of the month, the actual listing is still likely to take time. After filing its draft prospectus, the NSE will have to go through SEBI’s review process, respond to queries and finalize the size and structure of the offer. Even so, the regulator’s latest signal marks the clearest indication yet that the long-stalled IPO is finally back on track, bringing the country’s largest exchange a step closer to joining the stock market it operates.