The National Stock Exchange (NSE) has again approached the Securities and Exchange Board of India (SEBI), in hopes of getting approval for its long-awaited initial public offering (IPO). The stock exchange has written to the capital markets regulator and sought a No Objection Certificate (NOC) so that it can progress with its long-pending maiden offering, media reports said.
Citing sources in the know, Moneycontrol reported that the NSE submitted a formal request with the regulator on March 28, reaffirming its intent to address regulatory concerns that have hindered its listing process for over eight years.
The NOC is an important document required for proceeding with the IPO. Notably, NSE filed the draft red herring prospectus (DRHP) for its IPO way back in December 2016.
In its latest appeal, NSE emphasised its commitment to complying with regulatory requirements and requested permission to refile the DRHP with SEBI.
Ongoing Struggle for Approval
This is not the first time NSE has sought SEBI’s clearance for its IPO. The exchange, India’s largest in terms of market share, previously approached the regulator for an NOC in November 2019, twice in 2020, and most recently in August 2024. However, concerns raised by SEBI have led to continued delays in the approval process.
In its response to NSE’s last request on February 28, SEBI outlined key issues related to technology infrastructure, key management personnel (KMP), ownership structure of clearing corporations, and unresolved cases linked to the colocation matter. NSE’s latest submission attempts to address these concerns comprehensively.
A major point of contention has been NSE’s majority stake in its clearing subsidiary, NSE Clearing Ltd (NCL). SEBI has stressed the need for clearing corporations to operate independently from exchanges, especially with interoperability now in place among trading platforms.
In its defense, NSE has maintained that its holding structure is in line with existing regulatory norms. It also pointed out that both BSE and MCX, which are listed exchanges, own their clearing corporations as wholly-owned subsidiaries. The exchange further suggested that any potential changes in ownership norms could be highlighted as risk factors in its DRHP.
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Addressing Technology, Staffing, and Legal Challenges
NSE has also responded to concerns regarding its technology framework. The exchange highlighted that it has significantly upgraded its IT infrastructure over the past few years to enhance resilience and operational efficiency. It noted that there have been no major outages in the last four years and detailed its progress on the 82 technology recommendations provided by McKinsey in 2022. According to NSE, 65 of these have been implemented, nine were deemed unnecessary by an expert panel, and the remaining eight are in progress.
In terms of human resources, NSE updated SEBI on its workforce expansion. The exchange reported an increase in total staff strength from 1,115 in FY23 to 1,673 in FY25 (till date). Within this, critical operations personnel grew from 332 to 590, while employees handling regulatory, compliance, risk management, and investor grievances rose from 486 to 710 over the same period.
On the issue of pending legal matters, NSE reiterated its willingness to resolve all outstanding cases amicably through a settlement process. The exchange stated that its governing board had reaffirmed its intent to settle all disputes and had formally approached SEBI in August last year to facilitate resolution across various judicial and regulatory platforms.
