After nearly nine years of regulatory reviews, legal scrutiny, and prolonged uncertainty, India’s largest stock exchange has crossed a critical milestone toward public listing. The Securities and Exchange Board of India (SEBI) has issued a no-objection certificate to the National Stock Exchange (NSE), clearing the most significant hurdle that had delayed its initial public offering for almost a decade.
This development marks a major moment not only for NSE, but also for India’s broader capital market ecosystem. As the country’s dominant trading platform moves closer to public ownership, the decision raises important questions around governance, investor access, valuation, and the future role of financial infrastructure institutions.
This blog explains why the IPO was delayed for so long, what SEBI’s approval really means, how the listing timeline could unfold, and why NSE’s public debut matters for investors and the Indian financial system.
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A Long-Awaited Regulatory Breakthrough
SEBI’s decision to grant the no-objection certificate is a defining moment in one of India’s longest-running IPO stories. Without this approval, NSE could not legally file its draft red herring prospectus or initiate the public listing process.
With the NoC now in place, the exchange can begin the procedural and compliance steps required to enter the stock market.
The clearance also brings an end to a regulatory standstill that began in 2016, when NSE first applied to go public. At the time, expectations were high that it would follow BSE Ltd, which listed successfully the same year. Instead, NSE’s plans were put on hold as regulators raised concerns around its internal systems and governance practices.
The timing of this approval signals a regulatory shift toward resolving legacy issues through reforms and disclosures, rather than indefinitely blocking market access.
Why Did NSE’s IPO Take Almost a Decade?
The delay in NSE’s IPO was not caused by a single factor. It resulted from a combination of regulatory, legal, and governance issues that SEBI considered significant, given NSE’s role as a market infrastructure institution.
The Co-Location Server Case Explained
One of the most important reasons behind the delay was the co-location controversy.
Allegations emerged that certain high-frequency trading firms had gained faster and more reliable access to NSE’s trading systems through private servers and specialised communication lines. This reportedly allowed select participants to receive market data slightly earlier than others, giving them an unfair advantage.
SEBI investigated the matter and, in 2019, directed NSE to disgorge gains and imposed penalties on former senior officials. While parts of these decisions were later modified through legal proceedings, the episode raised serious concerns about fairness and system integrity.
For an exchange that functions as the backbone of India’s trading ecosystem, even the perception of unequal access was enough to halt IPO plans.
Governance and Accountability Issues
Beyond technology-related concerns, SEBI also questioned NSE’s governance framework, internal controls, and decision-making processes.
As a self-regulatory organisation, NSE has responsibilities that extend beyond profit-making. These include market surveillance, investor protection, and systemic stability.
SEBI maintained that listing such an institution without addressing governance gaps could introduce conflicts of interest and broader risks. Over the years, NSE introduced leadership changes, strengthened compliance systems, and implemented tighter internal controls to address these concerns.
These reforms were critical in restoring regulatory confidence.
What SEBI’s No-Objection Certificate Actually Means
The no-objection certificate does not mean NSE will be listed immediately. Instead, it allows the exchange to formally begin the IPO process under SEBI’s supervision.
With the approval in place, NSE can now prepare and file its draft red herring prospectus. This document will include:
- Financial performance and revenue sources
- Business and operating structure
- Governance framework
- Risk factors and disclosures
- Pending legal matters
- Shareholding pattern
SEBI will review the draft prospectus and may seek clarifications before granting final approval. Only after this stage can the exchange announce IPO dates, price bands, and allocation details.
In short, the NoC unlocks the process, but several steps remain before listing.
Expected Timeline for NSE’s IPO
Market participants estimate that the IPO process could take six to eight months from the issuance of the no-objection certificate, assuming stable market conditions.
The early phase involves drafting the prospectus and appointing bankers, legal advisors, and auditors. Given the scale of NSE’s operations, this stage may take several months.
Once filed, SEBI’s review typically takes two to four months, depending on the number of observations raised. After final approval, the exchange can proceed with investor roadshows and subscription opening.
If conditions remain favourable, NSE could potentially list by late 2026.
How Big Could the NSE IPO Be?
NSE’s IPO is expected to be one of the largest in India’s history.
Based on recent unlisted market transactions, the exchange is valued at over ₹5 trillion. This places it far above most listed companies and significantly larger than BSE Ltd.
Under SEBI regulations, companies with a market capitalisation above ₹5 trillion are required to maintain a minimum public shareholding of 2.5 percent. Even at this level, the IPO could raise over ₹13,000 crore.
The relatively small public float indicates that while investor participation will increase, control of the exchange will remain largely concentrated.
What NSE’s Listing Means for Investors
For investors, NSE’s listing offers a rare opportunity to invest in a core financial institution that benefits directly from market activity.
Stock exchanges generate revenue from transaction fees, data services, clearing and settlement operations, and technology offerings. These income streams tend to be stable and grow alongside market participation.
Public listing also brings higher transparency, regular disclosures, and greater accountability. Over time, this can strengthen trust in institutions that play a critical role in the financial system.
Broader Impact on India’s Capital Markets
NSE’s IPO carries implications beyond shareholder value.
It reinforces the idea that market infrastructure institutions must operate under public oversight and market discipline. It could also encourage other financial infrastructure entities, such as clearing corporations and depositories, to explore public listings.
More broadly, it reflects the maturity of India’s capital markets, where long-standing regulatory concerns are addressed through reform and disclosure rather than prolonged exclusion.
Risks That Still Remain
Despite the positive outlook, certain uncertainties persist.
Some legal and regulatory matters linked to earlier governance issues are still ongoing. While SEBI has permitted NSE to move ahead with disclosures, these matters will remain important considerations for investors.
Market volatility is another factor. Global or domestic fluctuations could influence IPO timing, pricing, or demand, especially given the size of the offering.
Conclusion
SEBI’s no-objection certificate marks a decisive turning point in the National Stock Exchange’s long-awaited IPO journey. After years of regulatory challenges and structural reforms, the exchange is finally on track to enter the public markets.
While procedural steps remain, the most significant barrier has been removed. When NSE eventually lists, it will not only be a major financial event but also a reflection of how India’s capital markets have evolved to balance growth, governance, and accountability.
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