NSE Writes Fresh Letter To Sebi For IPO NoC

D-Street is awaiting the launch of National Stock Exchange’s (NSE’s) initial public offer (IPO). In a bid to take the listing process further, the NSE has also written a letter to the Securities and Exchange Board of India (Sebi) seeking a no objection certificate (NoC) for the same.

According to a report by Moneycontrol, NSE’s letter was addressed to V S Sundarasan the executive director, market regulation department of Sebi. 

Notably, the receipt of the NoC is crucial for the company to move forward with its listing process. The NSE IPO has been on the cards for a very long time as the company first filed its Draft Red Herring Prospectus (DRHP) in December 2016.

“We hereby submit this request letter to SEBI for seeking NOC/permission to take further actions towards listing of shares of NSE including filing the DRHP with SEBI,” NSE said.

Earlier in February this year, Sebi had responded to a previously filed request for an NoC by the exchange. 

In its response to NSE’s letter, Sebi had raised concern over certain issues, such as the exchange’s holding in its clearing corporation and the efficiency of the technology used by the exchange, among others.

In its fresh appeal, NSE has responded to the questions raised by the market regulator. NSE has a significant stake in its clearing corporation, NSE Clearing Ltd (NCL). The market regulator believes that clearing corporations should be seen as independent of exchanges.

In its letter addressed to Sebi, NSE said that its holding in NCL is not violating any norms and that the existing regulatory framework has already allowed both BSE and MCX to have clearing corporations as their wholly-owned subsidiaries. 

Additionally, Sebi has not framed the rules for the demerger of clearing corporations from exchanges.

Additionally the NSE also outlined several steps it has taken to bolster its technology infrastructure. The exchange also mentioned in the letter that it has not had a single instance of a major outage occurring in the last four years.

Earlier in 2022, Sebi had also highlighted 82 initiatives suggested by McKinsey, NSE disclosed that out of the 82 initiatives, as many as 65 have been implemented and nine have been dropped. The NSE also responded to Sebi’s concern around the exchange’s pending cases. In turn, the exchange has reaffirmed that it is keen to resolve all pending matters via a settlement mechanism.

Till now, Sebi has not responded to the NSE’s latest request for a NOC. Investors are now awaiting Sebi’s response which is likely to determine the timeline for NSE’s IPO.