NSE Resumes IPO Process: A New Chapter for India’s Largest Stock Exchange
Mumbai, the financial capital of India, is abuzz with excitement as the National Stock Exchange (NSE) has officially restarted its long-awaited process to get listed. This significant move comes after more than eight years of delays, primarily due to regulatory hurdles and internal controversies. On Tuesday, the NSE’s board granted its management the green light to approach the Securities and Exchange Board of India (Sebi) for a no-objection certificate (NOC) to file its Initial Public Offering (IPO) papers.
A Long and Winding Road
The journey towards NSE’s IPO has been fraught with challenges. The exchange initially filed a draft prospectus with Sebi in 2016, but the process was derailed when allegations surfaced regarding preferential treatment given to certain entities in its futures and options (F&O) trading servers. This scandal implicated former Managing Director Chitra Ramkrishna and several other officials, leading to a series of investigations by Sebi. In 2019, amidst the ongoing scrutiny, NSE withdrew its IPO documents, marking a significant setback in its ambitions to go public.
In 2022, the exchange attempted to revive its IPO plans but was advised by Sebi to hold off once again. The recent developments, however, signal a renewed commitment from NSE to navigate the regulatory landscape and finally achieve its goal of becoming a publicly listed entity.
The Path Forward
With the board’s approval, NSE management has already initiated contact with Sebi to secure the necessary NOC. Following this, the exchange will prepare a draft prospectus and submit it to the regulator. Once Sebi completes its scrutiny and grants approval, NSE can officially launch its IPO. This streamlined approach is expected to expedite the listing process, which has been stagnant for far too long.
During its annual general meeting on Tuesday, NSE also updated its shareholders about this pivotal move, emphasizing the importance of obtaining the NOC from Sebi. If successful, NSE will become the third listed exchange in India, joining the ranks of the Multi Commodity Exchange (MCX) and the Bombay Stock Exchange (BSE).
Market Implications and Valuation
The potential listing of NSE carries significant implications for the Indian financial markets. Based on the value of NSE shares in the unlisted space, market analysts estimate that the exchange could achieve a market valuation between Rs 2.1 lakh crore and Rs 3.1 lakh crore. This valuation is likely to see an upward trajectory once the exchange is publicly traded, as stocks that are listed typically enjoy a liquidity premium.
It’s important to note that NSE cannot list its shares on its own trading platform due to regulatory restrictions. Consequently, once listed, NSE shares will be traded exclusively on the BSE, adding an interesting dynamic to the trading landscape.
Conclusion
The resumption of NSE’s IPO process marks a significant milestone in the evolution of India’s financial markets. After years of regulatory scrutiny and internal challenges, the exchange is poised to take a monumental step towards becoming a publicly listed entity. As the largest stock exchange in India by turnover and revenues, NSE’s listing is not just a corporate milestone; it represents a broader narrative of resilience and ambition in the Indian financial sector. Investors, market participants, and stakeholders will be closely watching this development, eager to see how it unfolds in the coming months.