NSE IPO Moves Closer as Sebi Gives In-Principle Nod to Settlement Plea

Settlement Progress Seen as Key Step Toward Long-Awaited Listing​

The initial public offering plans of the National Stock Exchange received a fresh push on Thursday after **Securities and Exchange Board of India chairman Tuhin Kanta Pandey said the regulator has given an in-principle agreement to the settlement plea filed by the exchange in the unfair market access case.

The development is widely viewed as a critical step toward clearing regulatory hurdles that have delayed the IPO of National Stock Exchange, the country’s largest bourse by trading volumes.

Pandey said the settlement application is currently under review by multiple committees, adding that there is broad agreement in principle on the proposal. He declined to comment on trading activity in NSE shares in the unlisted market, noting that the issue falls under the purview of the Ministry of Corporate Affairs.

Government Clears Lower IPO Stake Sale for Large Companies​

Alongside the settlement update, Pandey confirmed that the government has approved a proposal allowing large companies to dilute 2.5 percent equity through an IPO. The move is expected to ease listings for very large enterprises.

The threshold change aligns with an earlier policy decision to reduce the minimum public shareholding requirement for entities valued above Rs 5 lakh crore, a category that includes NSE and Reliance Jio.

Background on the NSE Settlement​

NSE has been attempting to go public since 2016, with progress hindered by the colocation matter, where certain brokers were alleged to have received preferential access to trading systems. Following prolonged legal proceedings, the exchange proposed a settlement amounting to Rs 1,388 crore in 2025 to resolve the case and move ahead with its listing plans.

The settlement is considered a prerequisite for the issuance of a no-objection certificate from Sebi, which is required before IPO-related filings can begin. Pandey has earlier indicated that the NOC is expected within about a month.

NSE’s IPO is anticipated to rank among the largest offerings in Indian capital market history once it reaches the market.

IPO Timeline After Regulatory Clearance​

Commenting on the development, NSE managing director and chief executive Ashish Kumar Chauhan described the in-principle approval as positive, while noting that formal communication is still awaited.

He said the exchange would begin preparations for filing the draft red herring prospectus once the NOC is received. According to Chauhan, the DRHP filing could take up to four months after the NOC, and the IPO itself is likely to reach the market around seven to eight months following regulatory clearance, subject to process timelines.

Sebi Flags Disclosure Gaps in IPO Filings​

Addressing investment bankers, Pandey highlighted recurring disclosure shortcomings observed during regulatory inspections. He noted that due diligence processes are not always fully independent and sometimes rely excessively on issuer assurances.

Pandey stressed the need for independent verification of projections related to working capital and capital expenditure. He underlined that investment bankers play a crucial role in maintaining disclosure integrity, ensuring that offer documents are clear, complete, and verifiable across business operations, risks, governance, and use of funds.

He added that gaps in disclosures often result in regulatory queries and extended fundraising timelines. Greater clarity was sought on capital structure, including past fundraisings, preferential allotments, recent changes in control, and a more detailed explanation of business models and performance drivers within management discussions.

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