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The National Stock Exchange of India has finally received the green light from the Securities and Exchange Board of India to proceed with its initial public offering, marking the end of a nearly decade-long wait. The regulatory approval represents a major milestone for India's largest stock exchange and sets the stage for what could become the country's biggest-ever public listing. Sebi granted the no-objection certificate on Friday, clearing a crucial regulatory hurdle that had prevented the exchange from moving forward with its share sale plans. The approval comes after years of delays stemming from legal and governance concerns that required resolution before the regulator could grant its consent. "We are delighted to receive Sebi approval for our IPO - a significant milestone in our growth journey," said Srinivas Injeti, chairperson of NSE, in a statement following the announcement. He added that the approval reinforces confidence in the exchange as an integral part of the Indian economy and a beacon of the country's capital markets.
Timeline to Market
With the regulatory clearance now in hand, NSE can begin preparing its draft documents for submission to Sebi. According to earlier statements from NSE chief executive Ashishkumar Chauhan, the journey from receiving the no-objection certificate to actual listing typically takes eight to nine months. Industry sources suggest the exchange may file its draft red herring prospectus by April or May this year. The proposed offering is expected to be entirely an offer for sale, meaning existing shareholders will sell their stakes rather than the company raising fresh capital. In the unlisted market, NSE is currently valued at approximately ₹5 lakh crore, making it one of the most valuable exchanges globally. This valuation has generated significant excitement among investors and market watchers who view the IPO as a landmark event for Indian capital markets.
Extraordinary Investor Interest
The upcoming listing has already attracted remarkable attention in the unlisted market. According to Deep Shah, senior manager at Mumbai-based merchant banking firm Unistone Capital, the number of shareholders holding NSE's unlisted shares has surged to over 1.5 lakh, representing a more than fourfold increase in just one quarter. "The upcoming NSE IPO has emerged as one of the most closely watched market events, especially after Sebi's go-ahead, driven by exceptional investor interest and robust unlisted market activity," Shah noted. He expects the offering to be the largest IPO both in terms of size and post-market capitalization, drawing interest from domestic and international financial communities alike. Despite being unlisted, NSE already maintains a substantial retail shareholder base. As of December 2025, the exchange had 171,563 retail shareholders collectively holding about 12.3 percent of the company.
Resolving Past Issues
The path to regulatory approval has been long and complex. NSE first sought Sebi's permission for an IPO on October 18, 2016. However, the regulator withheld approval due to several serious concerns, including the co-location case, governance lapses at the exchange, and questions about its technology infrastructure. The co-location case, which remains pending before the Supreme Court, involves allegations that certain brokers received preferential access to NSE's trading servers between 2015 and 2016. This case has been a significant overhang on the exchange's plans for years. To clear the way forward, NSE approached Sebi in June 2025 seeking to settle proceedings related to the co-location and dark fiber cases under the regulator's consent mechanism. The exchange offered close to ₹1,400 crore to resolve these matters. NSE has recognized a provision of ₹1,297 crore in its books, including interest, toward the settlement of these cases. This amount comes over and above a ₹100 crore penalty imposed by the Securities Appellate Tribunal in the co-location case, which had already been adjusted against amounts deposited with Sebi in fiscal year 2023. According to sources familiar with the matter, Sebi has agreed to the settlement in principle, with final terms expected after approval from its high-powered advisory committee. Once Sebi formally clears the settlement, it will need to file an affidavit in the Supreme Court seeking withdrawal of its appeal in the co-location case.
Financial Impact
The settlement provisions have affected NSE's recent financial performance. The exchange reported a consolidated net profit of ₹2,098 crore in the second quarter of fiscal year 2026, significantly lower than the ₹3,137 crore recorded a year earlier. The decline was primarily due to one-time provisioning related to settlement applications filed with Sebi. Consolidated revenue from operations also fell nearly 18 percent year-on-year to ₹3,676.8 crore in the quarter. Revenue from transaction charges dropped 22 percent to ₹2,785 crore, reflecting lower trading volumes across both cash and derivatives segments. In January 2023, the Securities Appellate Tribunal upheld non-monetary penalties against NSE but set aside a disgorgement order, instead imposing a fine of about ₹100 crore for lapses in due diligence. Later that year, the Supreme Court directed Sebi to refund around ₹300 crore to the exchange in connection with the matter.
Looking Forward
The regulatory clearance represents a new chapter for NSE as it prepares to transition from a privately held entity to a publicly traded company. The exchange plays a central role in India's financial markets and handles the majority of equity trading volumes in the country. For regulated entities in India, obtaining a no-objection certificate from their respective regulators is a mandatory prerequisite before filing for an IPO. In NSE's case, both the NOC and eventual approval of the draft red herring prospectus are required from Sebi, creating a two-stage approval process. The exchange now faces the task of preparing comprehensive disclosure documents and navigating the remaining regulatory steps before it can launch its public offering. Given the size and significance of the proposed listing, the IPO is expected to attract substantial attention from both institutional and retail investors when it finally comes to market. Disclaimer: This article is for informational purposes only and should not be considered as investment advice. Please consult your financial advisor before making any investment decisions. Investments in the market are subject to risks.