India’s NSE Takes Key Step Toward Long-Awaited IPO After Regulator Clears Path

Mumbai — The National Stock Exchange of India (NSE) has taken a decisive step toward a long-delayed public listing, with its board on Friday approving an initial public offering through a sale of existing shares and reconstituting a dedicated committee to run the process.

Board approves offer-for-sale structure

In a meeting held Feb. 6, the NSE governing board “considered and approved undertaking an initial public offering through an offer-for-sale by existing shareholders of the company for the listing of equity shares of face value of Re 1 each,” the exchange said in a statement.

The board also approved the reconstitution of its IPO committee, which will act as the central body for the listing, including selecting merchant bankers and legal advisers and overseeing preparation of a draft red herring prospectus (DRHP).

The move, coming days after the market regulator cleared the way for a float, marks the most concrete step yet in a listing plan that has been stalled for nearly a decade by regulatory scrutiny and governance scandals at India’s largest bourse.

Expected size and timeline

NSE’s offer is expected to be structured as a pure offer for sale, with no fresh issue of shares. People familiar with the early contours said the exchange is working with shareholders on a sale of about 4% to 4.5% of its equity, potentially raising more than 23,000 crore rupees at prevailing unlisted-market prices. That would make it one of the largest IPOs in Indian history by offer size, comparable with the government’s listing of Life Insurance Corp. of India.

No DRHP has yet been filed with the Securities and Exchange Board of India (SEBI), and final deal size and pricing will only be known at that stage. People aware of the matter said NSE is targeting a DRHP filing by late March or early April, depending on which quarter’s audited financials are used, implying a possible market debut between August and October if regulatory timelines hold.

SEBI no-objection ends years of delay

The board’s decision follows SEBI’s issuance of a no-objection certificate for the IPO on Jan. 30, ending a wait that began when NSE first filed draft papers for a share sale in 2016.

NSE chairperson Srinivas Injeti welcomed the regulator’s clearance last week, calling it “a significant milestone” for the exchange. The approval “reinforces confidence in NSE as an integral part of the Indian economy and a key pillar of the capital markets,” he said in a statement.

Settlement tied to co-location case

SEBI’s nod came after the exchange agreed to settle long-running regulatory proceedings tied to its co-location facility, in which certain brokers were alleged to have received unfairly fast access to trading systems. Under the settlement framework, NSE has provisioned around 1,300 crore rupees in its 2024–25 accounts and is expected to pay more than 1,400 crore rupees in total, including amounts already deposited and interest, according to people with knowledge of the process.

The co-location matter was at the heart of SEBI’s April 2019 order directing NSE to disgorge 625 crore rupees, plus 12% interest from 2014, and barring the exchange from accessing securities markets for six months. The regulator found that NSE did not ensure equal and fair access to its trading systems for all members. It also ordered former managing directors Ravi Narain and Chitra Ramkrishna to return part of their compensation and barred them from association with market infrastructure institutions.

Separate orders later detailed serious governance lapses, including findings that Ramkrishna had shared confidential internal information with an unidentified spiritual adviser. NSE and former officials challenged parts of the orders in the Securities Appellate Tribunal, which in 2023 set aside the disgorgement requirement but did not fully close the enforcement chapter.

The settlement and no-objection certificate effectively clear the regulatory overhang that had made it politically and legally difficult to approve an IPO for the country’s dominant equity and derivatives marketplace.

Valuation and performance backdrop

For investors, the listing would provide price discovery and liquidity in what is widely seen as India’s most valuable unlisted company. Unlisted shares of NSE have in recent months traded around 2,000 to 2,200 rupees in the secondary market, implying a valuation of roughly 5 trillion rupees. That would place the exchange among the world’s most valuable bourse operators, in the league of Hong Kong Exchanges and Clearing and CME Group.

NSE’s financial performance underpins those valuations. On a consolidated basis, the exchange reported total income of about 19,200 crore rupees in the year ended March 31, 2025, up roughly 17% from the previous year. Net profit rose about 47% to more than 12,000 crore rupees, supported by strong growth in derivatives trading and related income. The board declared a total dividend of 35 rupees per share for the year, including a special one-time payout.

More recent results show some cooling from those highs. For the quarter ended Dec. 31, 2025, NSE’s consolidated profit after tax fell about 37% from a year earlier to roughly 2,400 crore rupees, while revenue from operations declined around 9%. The exchange attributed the drop to a high base and changes in trading volumes, even as profits remained robust.

Shareholding and potential sellers

Ownership of the exchange is spread across domestic financial institutions, foreign investors and a growing base of individuals. Life Insurance Corp. holds a stake of just over 10%, making it NSE’s largest single shareholder. State Bank of India and its investment arm together own more than 7%, while public sector insurers and Stock Holding Corp. of India together control several more percentage points.

Foreign portfolio and direct investors collectively own more than a quarter of the exchange, including global funds and private equity firms that invested in earlier funding rounds. Retail and high net worth investors together hold close to one-fifth of the equity, reflecting a sharp rise in individual participation in the unlisted market. The number of shareholders has swelled from about 5,000 at the end of 2023 to nearly 190,000 by December 2025, company data show.

The IPO will give some of these investors an opportunity to partially exit or rebalance holdings. Market participants expect a mix of state-backed institutions and foreign funds to sell into the offer, though the final list of sellers will be disclosed only in the offer document.

Committee, comparisons—and scrutiny ahead

The reconstituted IPO committee will be chaired by non-independent director Tablesh Pandey, a former managing director of LIC. Other members include public interest directors Srinivas Injeti, academic Mamata Biswal, retired Justice Abhilasha Kumari and professor G. Sivakumar, alongside managing director and CEO Ashishkumar Chauhan.

The listing will make NSE the second major domestic equity exchange to go public, after BSE Ltd., which listed in 2017 through a 1,243-crore-rupee offer for sale that was subscribed about 51 times. NSE, which dominates trading volumes in both the cash and derivatives segments, is expected to command a far higher valuation and investor interest.

Alongside the potential rewards, the move will sharpen focus on how a listed NSE balances its role as a for-profit company with its responsibilities as a market infrastructure institution that sets rules, supervises members and oversees listing and surveillance.

Once listed, NSE will face quarterly disclosure requirements and closer scrutiny from analysts and minority shareholders, even as it continues to be regulated by SEBI under a stricter framework for market infrastructure institutions introduced in recent years. The regulator has tightened norms on board independence, key management appointments and technology resilience after past lapses.

For policymakers, the exchange’s public debut is likely to be held up as evidence of the deepening of India’s capital markets. For investors, it will be a chance to own a slice of the platform that underpins most of their equity trades.

How the offering is priced, who chooses to sell and how the stock trades after listing will be closely watched as a test of confidence in India’s market backbone — and of whether a bourse that has spent much of the past decade under investigation can convince public investors that its next chapter will be defined more by growth than by governance questions.