NSE Hits 1 Lakh Shareholders, Rs 5 Lakh Market Cap — But IPO Still Faces Long Road

National Stock Exchange has reached 1 lakh shareholders, but many remain worried about the much-awaited IPO, people privy to the matter told NDTV Profit.

Additionally, the exchange now has a market cap of approximately Rs 5 lakh crore, becoming the largest unlisted company in the country. Meanwhile, a significant 31% stake in the company is currently held by public sector undertakings.

Several of SEBI's queries reportedly touched upon areas where the regulator does not currently have specific rules in place—for instance, restrictions on stock exchanges owning clearing corporations. In such cases, compliance is being worked out through clarificatory notes and risk disclosures in the DRHP, they added.

Despite this progress, the road to listing remains long. Even if SEBI grants approval soon, the listing process is expected to take at least a year, even under an accelerated timeline, one of the people quoted above mentioned.

SEBI had previously flagged a number of potential shortcomings with the bourse's IPO in a detailed letter, according to senior officials. The letter was sent at the end of February, coinciding with the conclusion of Madhabi Puri Buch's tenure as SEBI's chairperson.

In its letter, the regulator had given the NSE 24 months to comply with its advice, which included concerns for the exchange's internal processes, governance and more.

The regulator had advised NSE to pause the launch of the maiden book build offer by a year or two, until it addressed the concerns at hand. However, industry sources are of the belief that certain issues raised fall outside SEBI's purview and are unrelated to the IPO.

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. News articles 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.

However, the NSE colocation case was settled in October 2024 for a whopping amount of Rs 643 crore.