The National Stock Exchange of India (NSE) has cleared a major hurdle in its long-delayed journey to the stock market, with market regulator Securities and Exchange Board of India (SEBI) issuing its observation letter on Friday for the Exchange’s proposed initial public offering (IPO).
The regulatory clearance brings the country’s largest stock exchange significantly closer to a public listing, nearly a decade after its first attempt was derailed by regulatory concerns. The proposed issue is expected to be worth around ₹30,000 crore and could potentially become India’s largest IPO, depending on the final price and valuation.
NSE had filed its draft red herring prospectus (DRHP) with SEBI on 17 June 2026. The Exchange is now expected to move into the final stages of the offering, including filing its red herring prospectus (RHP) and announcing the price band.
Market sources indicate that the RHP could be filed as early as Tuesday, with the price band potentially being announced on 11 September 2026. The issue could open around a week later, while 25 September 2026 is being discussed as a tentative listing date. These timelines, however, have not been formally announced by NSE and remain subject to discussions with its merchant bankers and completion of regulatory and procedural requirements.
Entirely an Offer for Sale
The NSE IPO will be entirely an offer for sale (OFS). Existing shareholders will sell up to 148.9mn (million) shares, representing nearly 6% of the Exchange’s paid-up equity capital.
There will be no fresh issue of shares. Consequently, NSE itself will not receive any money from the IPO; the proceeds will accrue to the existing shareholders selling their stakes.
At an indicative valuation of around ₹5 lakh crore, the offering could overtake Hyundai Motor India's ₹27,870-crore IPO in 2024 to become the largest public issue in India’s capital markets. The final ranking will depend on the price band and the eventual issue size.
The NSE offering will compete for the record with the proposed IPO of Jio Platforms, Reliance Industries Ltd's digital services arm. Jio’s potential offering has been estimated at around ₹37,700 crore, although its IPO timetable has not yet been announced.
Among the major shareholders looking to sell are the State Bank of India (SBI) group, which plans to offer up to 24.75mn shares, followed by MS Strategic (Mauritius) Ltd with up to 16mn shares. Canada Pension Plan Investment Board (CPPIB) plans to sell around 11.9mn shares, while Aranda Investments (Mauritius) Pte Ltd will offer around 11.2mn shares.
Bank of Baroda and Stock Holding Corporation of India are also among the significant selling shareholders, with around 11.0mn and 10.9mn shares, respectively.
Other sellers include General Insurance Corporation of India (GIC Re), The New India Assurance Company, National Insurance Company, and United India Insurance Company, as well as individual shareholders.
From a Stalled 2016 Plan to a Potential Landmark Listing
NSE’s latest move marks a dramatic turnaround from its first attempt to go public in 2016. That plan was put on hold amid regulatory investigations, including the long-running co-location controversy involving allegations of preferential access to the exchange’s trading systems.
The Exchange subsequently worked through a series of regulatory and governance issues before returning to the IPO route.
A significant development occurred in 2025 when the NSE filed a settlement application regarding colocation (colo) and dark-fibre matters. The Exchange agreed to pay around ₹1,400 crore to resolve the long-running disputes. It made a provision of ₹1,297 crore in its November 2025 financial disclosures, in addition to ₹100 crore deposited with SEBI pursuant to a securities appellate tribunal (SAT) order in 2023.
SEBI subsequently granted in-principle approval to NSE’s settlement application in the unfair market access matter. NSE had offered around ₹1,388 crore to settle the dispute.
Following receipt of a no-objection certificate from SEBI, NSE’s board approved the IPO proposal on 6 February 2026.
The Exchange has appointed a 20-bank syndicate for the issue. The merchant bankers include Kotak Mahindra Capital, JM Financial, Morgan Stanley India, Citigroup, HSBC, JP Morgan India, SBI Capital Markets, Axis Capital, ICICI Securities and HDFC Bank.
A Dominant Position in India’s Markets
The proposed listing comes as NSE remains one of the world’s largest and most active exchange operators.
Founded in 1992, NSE has been India’s largest exchange by cash-market turnover and equity-derivatives turnover for much of its operating history. According to data cited in its DRHP, it retained that position through FY25-26.
NSE also remained the world’s largest equity-derivatives exchange by trading volume during FY25-26, recording more than 36.99bn (billion) contracts, including activity on NSE International Exchange. It ranked third globally by the number of cash-equity trades executed as of 31 March 2026.
NSE’s investor base has also expanded sharply. The number of unique registered investors rose from 30.87mn in March 2020 to 129.1mn by March 2026, a compound annual growth rate of 26.9%. Investors on the platform now span more than 99% of India’s postal codes, according to the exchange’s filing.
Its technology infrastructure has grown alongside trading volumes. NSE says its systems process between 12bn and 14bn messages a day. On 4 June 2024, it recorded its highest-ever single-day trading activity, with 293.85mn trades across segments.
Strong Financial Profile
NSE reported revenue from operations of ₹16,601 crore in FY25-26, compared with ₹14,780 crore in FY23-24. Net profit stood at ₹10,302 crore, against ₹8,305 crore two years earlier.
However, profit after tax declined from ₹12,188 crore in FY24-25 to ₹10,302 crore in FY25-26. Total income also slipped to ₹18,713 crore from ₹19,177 crore.
For the quarter ended March 2026, the Exchange reported an 8% year-on-year rise in profit after tax to ₹2,871 crore, while total income increased 22% to ₹5,360 crore.
The IPO is expected to give existing investors an opportunity to monetise stakes accumulated over many years. Several public-sector insurance companies, in particular, could book substantial gains because they acquired their NSE shares at relatively low prices.
For investors, however, the listing will offer something more significant: a direct route to owning a stake in the institution that sits at the centre of India’s rapidly expanding capital markets.
The SEBI observation letter does not itself mean that the IPO is ready to open. NSE will still need to complete the remaining procedural steps, including finalising its offer documents and price band. But after years of regulatory delays, the exchange’s public-market debut is now firmly within sight.
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