NSE IPO May Get SEBI Approval: Reportedly in Talks to Settle Co-Location Issue; NSE Unlisted Share Price Roars

NSE IPO: The National Stock Exchange (NSE) is reportedly in discussions with the Securities and Exchange Board of India (SEBI) to address pending issues hindering its Initial Public Offering (IPO). These deliberations include resolving the 'dark fibre' case through a consent mechanism, as indicated by sources familiar with the matter. The case involves allegations that NSE provided preferential access to certain brokers via co-location facilities using 'dark fibre' connections.

NSE IPO Update: SEBI May Approve NSE IPO!

As per news reports, SEBI is currently considering two options. One possibility is that NSE withdraws the dark fibre case from the court and submits a consent application. Alternatively, SEBI may choose to issue a No Objection Certificate with certain conditions attached. These conditions could include the requirement for NSE to provide clear disclosures in the draft red herring prospectus and to recognise the case as a contingent liability. This move is important as NSE aims to advance its long-delayed IPO.

On May 22, SEBI Chairman Tuhin Kanta Pandey expressed optimism about the IPO's progress, by saying, "All the outstanding issues will be resolved and we will move forward...NSE and Sebi are talking, they are resolving the issues and I am very hopeful, it will be cleared and will move forward."

Timeline of SEBI's Approval and Restrictions on NSE

In November 2016, SEBI granted approval for NSE's equity shares to be listed on a recognised stock exchange, subject to adherence to relevant regulations and SEBI guidelines. This approval was supported by resolutions passed by NSE's Board of Directors and shareholders in October and November of the same year. At that point, neither NSE nor its directors faced any restrictions from SEBI or other regulatory bodies regarding their participation in capital markets.

However, in 2019, SEBI imposed a six-month ban on NSE from accessing the securities market following complaints concerning its co-location services. While the Securities Appellate Tribunal (SAT) reduced the financial penalties in January 2023, it maintained the ban on NSE's market access.

In its 2022-2023 annual report, NSE highlighted that the six-month market access restriction imposed by SEBI had concluded and that it was awaiting further approval for listing.

Reports from December 2023 suggested that SEBI had set additional conditions for NSE's IPO approval, such as ensuring a glitch-free operational year, enhancing technological infrastructure, and improving corporate governance.

Despite facing hurdles, NSE has firmly established itself as a leading player in India's financial markets. It handles the highest trading volumes and generates the most revenue, holding a dominant share in the country's equity derivatives segment.

NSE India Unlisted Share Price Today

Shares of the National Stock Exchange (NSE) in the unlisted market are currently trading at Rs 2,150, up Rs 150 or 7.5%. This also marks the 52-week high for the stock, with the 52-week low at Rs 1,240 at 2.52 PM on Monday.

At this price, NSE's estimated market capitalisation stands at Rs 5.32 lakh crore. The company's earnings per share (EPS) is Rs 49.24, and the price-to-book (P/B) ratio is 17.5. The stock P/E ratio is 43.7, and the book value per share is Rs 122.6.

NSE shares have a face value of Rs 1 and a debt-to-equity ratio of 0, indicating no debt on its books. The lot size for unlisted trading is 500 shares, and transactions require a Right of First Refusal (ROFR).

NSE Market Share

With an 87.4% market share in equity options, NSE's influence remains significant. Recently, the exchange was valued at Rs 4.7 lakh crore, making it the most valuable unlisted company in India, surpassing even the Serum Institute of India. This impressive growth highlights NSE's crucial role in the stock market and its continued ability to attract a large investor base.

Take a Poll

SEBI Chairman Tuhin Kanta Pandey has suggested that the remaining issues surrounding NSE's IPO are expected to be resolved soon. Although he did not specify a timeline, he expressed confidence that the IPO process would progress shortly. This update comes after years of waiting, with NSE's IPO application under review since March. In comparison, NSE's rival, the Bombay Stock Exchange (BSE), completed its public listing back in 2017, making the delay in NSE's IPO all the more notable