Sebi Clears NSE’s Long-Awaited IPO, Ending Years Of Regulatory Limbo

The Securities and Exchange Board of India (Sebi) has granted its no-objection certificate for the long-pending initial public offering (IPO) of the National Stock Exchange (NSE), according to an official communication by the exchange. The approval clears the way for a listing that has been in the making for over a decade, delayed by governance lapses and prolonged regulatory scrutiny.

“We are delighted to receive Sebi approval for our IPO — a significant milestone in our growth journey," said Shri Srinivas Injeti, Chairperson, NSE.

"With Sebi’s approval, we embark on a new chapter of value creation for all our stakeholders. This approval also reinforces confidence in NSE being an integral part of the Indian economy and a beacon of Indian capital markets.”

Earlier this month, Sebi chairperson Tuhin Kanta Pandey had indicated that the regulator was at an advanced stage of issuing a no-objection certificate for NSE’s proposed public issue, fuelling expectations of a long-awaited clearance.

NSE IPO: A Decade-Long Wait

NSE’s IPO journey date back to December 2016, when it first filed its draft red herring prospectus (DRHP), proposing to raise around Rs 10,000 crore through an offer-for-sale by existing shareholders. However, the plan was soon derailed after Sebi flagged serious governance concerns linked to the co-location controversy, where certain brokers were alleged to have gained preferential access to the exchange’s trading systems.

Regulatory action in the aftermath effectively put the listing on hold, with Sebi withholding approval and the exchange making multiple attempts over the years to revive the proposal.

A turning point came in August 2024, when NSE reapplied to Sebi for a fresh no-objection certificate. Two months later, it settled the Trading Access Point (TAP) architecture and network connectivity case by paying a Rs 643 crore penalty. The case related to alleged shortcomings in handling instances where high-frequency traders were suspected of exploiting system access.

Since then, the exchange has pushed through a series of corrective steps, from overhauling senior management and reconstituting its board to tightening compliance systems and closing out legacy regulatory matters.

With Sebi’s clearance now in hand, the exchange appears closer than ever to making its stock market debut, bringing to an end one of India’s longest-running IPO sagas.