India’s largest stock exchange, National Stock Exchange of India (NSE), may have to pay a little over ₹18 billion to settle pending legal disputes with the market regulator, says a report from
Reuters. NSE has declined to comment on the report.
According to Reuters, the panel considered NSE’s proposal for settling past infractions about a fortnight ago. Following this, SEBI is expected to issue a demand notice asking the exchange to deposit the recommended amount before passing a final settlement order, the report adds, citing two sources with direct knowledge of the matter.
The long-running dispute relates to allegations of governance lapses at NSE, including claims that the exchange failed to provide equitable access to all trading members. These issues have delayed NSE’s much-awaited initial public offering (IPO) for nearly a decade.
The potential settlement is seen as a key step towards clearing regulatory hurdles for the IPO. Reuters reports that NSE last month appointed around 20 banks to manage the public issue—reportedly the highest number ever for an IPO in India.
The report further notes that the appointed bankers have reached out to NSE's existing shareholders, inviting expressions of interest to sell shares in the proposed offering, with a deadline of 27 April 2026. The exchange may file its IPO papers by late next month after announcing its financial results, one of the sources told Reuters.
As India’s largest bourse and the world’s biggest derivatives exchange by volume, NSE has around 190,000 shareholders and remains the country’s largest unlisted company.
When contacted, NSE declined to comment on the Reuters report. SEBI also did not respond to queries, according to the report.
The development signals progress in resolving regulatory overhangs that have held back one of India’s most anticipated public listings, though final clarity will depend on SEBI’s formal order and NSE’s compliance with the settlement terms.
NSE's efforts to clean the slate include a significant payment of ₹643 crore in October 2024 to settle a separate case linked to the controversial trading access point (TAP) system. The settlement covered the NSE and nine of its former key officials, including ex-MD & CEO Vikram Limaye.
The TAP system, deployed by NSE since 2008, came under regulatory scrutiny after SEBI found the exchange failed to implement timely safeguards to prevent potential misuse of the architecture by trading members. According to SEBI’s investigation, NSE continued with TAP in some market segments until as late as 2020, despite launching alternative systems like ‘trimmed TAP’ in 2013 and ‘direct connect’ in 2016.
In August 2024, NSE sought fresh approval from SEBI to move forward with its IPO. This update, detailed in NSE's latest annual report, follows a series of regulatory challenges that have previously affected its listing efforts.
In its April 2019 order, SEBI had imposed a significant penalty on the exchange amounting to over ₹1,000 crore with interest. Additionally, the regulator had barred NSE from raising funds through equity, debt, or other securities for six months. This restriction ended on 30 October 2019.
However, due to a significant reduction in the number of shares offered for sale, specifically by more than 50%, SEBI required NSE to file new offer documents. As a result, the draft red herring prospectus (DRHP) submitted earlier was returned. Subsequently, NSE approached SEBI again in 2022 but was instructed to hold off at that time.
Recent updates indicate that NSE has reignited its efforts to get listed. Despite the expiration of the previous restriction, NSE is still awaiting SEBI's response to its latest request. The exchange has asked SEBI for a no-objection certificate to proceed with its IPO plans and to refile the DRHP. As stated in its annual report, "NSE has requested SEBI to convey its no-objection to enable it to proceed with its IPO plan and for filing the DRHP. Response from SEBI is awaited."
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