SEBI May Give Conditional Nod For NSE IPO
NSE is also likely in talks with SEBI to settle cases with SEBI, sources said.
The Securities and Exchange Board of India may issue a No Objection Certificate with conditions to the National Stock Exchange for its proposed initial public offering, according to people familiar with the matter.
These conditions may include clear disclosures in the draft red herring prospectus and listing the case as a contingent liability, the people said.
NSE is also likely in talks with SEBI to settle cases with the regulator, the people said. This includes matters related to the dark fibre case through the consent route.
The case involved allegations that NSE provided preferential access to some brokers through co-location facilities using “dark fibre” connections.
SEBI is considering two possible options. One is that NSE may withdraw the dark fibre case from court and file a consent application with SEBI. The other is that SEBI may issue a No Objection Certificate with conditions.
SEBI Chairperson Tuhin Kanta Pandey, speaking at an event in New Delhi on May 22, said the NSE IPO will “hopefully progress soon” once outstanding issues are resolved.
NSE had filed its IPO prospectus in 2016.
In a letter dated Nov. 21, 2016, SEBI had 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 the markets regulator 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 Rs 643 crore.
