With Sebi’s nod in place, NSE is expected to move closer to finalising the structure and timing of its IPO, though the exchange is yet to make an official announcement.
According to an earlier Reuters report, the government approved a 2.5% stake dilution in the exchange and that a notification in this regard will be issued soon. “NSE is said to be planning to file its draft listing papers by the end of March and is in discussions with investment bankers and law firms to finalise the prospectus and assess investor appetite,” the report said.
The NSE listing is expected to attract strong attention from investors because of the its dominant role in India’s stock and derivatives markets and its wide shareholder base across institutions and retail investors.
NSE, which is the world’s largest derivatives exchange by trading volumes, has been trying to list its shares since 2016. However, the plan was held up due to regulatory probes linked to its co-location facility and broader governance issues. The case is still pending before the Supreme Court. Last year, NSE offered to settle the matter by paying Rs 1,387 crore.
The regulatory environment has also become more supportive in the recent past. Sebi has eased public float norms for very large companies, allowing firms valued above Rs 5 lakh crore after listing to sell just 2.5% of their equity, instead of the earlier requirement of 5%. The move was intended to make it easier for large platforms, including stock exchanges, to tap public markets.
Speculation around the NSE IPO has pushed up demand for its shares in the unlisted market, with prices rising about 10-15% over the past two months. NSE also stands out for its unusually large shareholder base for an unlisted company, with about 1,77,807 investors, making it the most widely held unlisted firm in India.Tejas, vice president–marketplace at Qapita, said the investor reaction was unsurprising. According to him, the exchange operates in a near-duopoly market with very high entry barriers across regulation, technology and capital. The renewed regulatory momentum has prompted buyers to step in, pushing unlisted prices higher in a short span of time.
On the financial front, NSE reported a 33% drop in profit after tax in the September quarter, while consolidated revenue from operations fell 18% from a year earlier. The numbers highlight that despite its strong market position, the exchange’s earnings remain sensitive to regulatory changes and market conditions.