NSE Files For Up To Rs 1,400-Crore Settlement In Co-Location, Dark Fibre Cases Ahead Of IPO

The National Stock Exchange has filed for settlement in the pending co-location and dark fibre cases, according to people familiar with the matter.

An amount of between Rs 1,300 crore to Rs 1,400 crore has been offered as part of the proposed settlement, the people said, adding that the matter remains pending for approval from the Securities and Exchange Board of India.

If approved, the settlement could clear the path for NSE's long-delayed IPO, they said.

The initial public offering of the National Stock Exchange has been the subject of much discourse in the past few years. However, it seems that the fog around it is finally becoming thinner, especially since the markets regulator has also changed its stance on two major issues—the demerger of clearing corporations from their parent exchanges and a softer stance for allowing listing of companies with a large public float.

On Feb. 28, SEBI had raised concerns in a letter about possible conflicts of interest linked to the NSE's significant ownership stake in its clearing subsidiary, NSE Clearing Ltd. However, the issue has been put to rest with the formulation of a new working group.

The exchange had filed its IPO prospectus back in 2016.

In a letter dated Nov. 21, 2016, the markets regulator approved the listing of equity shares on a recognised stock exchange, contingent upon compliance with applicable regulations and SEBI circulars. The offer received approval from NSE's board of directors and shareholders through resolutions passed on Oct. 4, 2016, and Nov. 10, 2016, respectively.

During that period, NSE, its directors, and its group companies were not barred from accessing or operating in capital markets by SEBI or any other authorities.

However, in a 2019 order, SEBI barred NSE from accessing the securities market for six months due to complaints related to its co-location facilities. Although the Securities Appellate Tribunal modified financial penalties in January 2023, it upheld the market access restriction.

Subsequently, NSE's 2022-2023 annual report emphasised that the six-month prohibition period had ended and that it awaited SEBI's further approval for listing. Reports in December 2023 suggested SEBI had imposed additional conditions for NSE's IPO approval, including maintaining a glitch-free year, enhancing technological infrastructure, improving corporate governance, and resolving pending legal matters.

Notably, the NSE co-location case was partially settled in October 2024 for a whopping amount of Rs 643 crore.