NSE IPO: Will NSE file its draft IPO prospectus by the end of March after years of delay?

Synopsis: In this article, we will examine whether NSE will file its draft IPO prospectus by the end of March after years of delay, and explore the reasons behind the prolonged listing process, including regulatory hurdles that have caused the delay in its IPO.

The country’s largest exchange, the National Stock Exchange of India (NSE), plans to file its draft prospectus for a long-awaited IPO by the end of March, according to sources.

According to news reports, SEBI Chairman Tuhin Kanta Pandey stated last week that the regulator is in the advanced stages of granting the No Objection Certificate (NOC) for the National Stock Exchange’s (NSE) initial public offering (IPO). These remarks were made on the sidelines of an event in Chennai and signal progress in the much-anticipated IPO.

The exchange is in early discussions with investment bankers and law firms to prepare the prospectus and assess investor interest, though it has not yet said how much equity will be offered. 

NSE’s unlisted shares currently value the company at about $55 billion. Formal appointments of advisors will be made after SEBI issues a no-objection certificate, which the regulator’s chairperson said could possibly be granted this month. 

Why Delay in Listing?

India’s largest stock exchange, the National Stock Exchange (NSE), has been trying to list since 2016, but the process has been delayed due to a case that is pending in the Supreme Court. 

First IPO attempt in 2016: NSE first filed draft IPO papers with the Securities and Exchange Board of India (SEBI) in 2016, signalling its intent to go public and allow its shareholders to sell part of their holdings. The approval has been delayed by regulatory investigations into ‌its conduct on fair market access for traders via its co-location facilities.

The case against the National Stock Exchange (NSE) revolves around allegations of unfair trading practices related to its co-location facilities. Co-location allows traders to place their servers physically close to the exchange’s servers to gain faster access to market data, which can give them a millisecond-level advantage in trading.

Regulatory Hurdles and Delays

2019 – Draft Returned & Major Penalty: SEBI returned NSE’s draft listing application, citing unresolved issues, particularly concerning equitable access to its trading systems, including co‑location services. In addition, SEBI imposed a fine of Rs. 11 billion on NSE for failing to ensure fair access for high‑frequency traders, creating a significant regulatory hurdle for the exchange.

2020–2022 – Further SEBI Observations: A fresh IPO application in 2022 was met with detailed observations from SEBI, addressing issues related to technology, governance, surveillance, and the exchange’s regulatory role. SEBI requested that NSE address these concerns before approving.

Oct 2024 – Penalty Settlement: NSE settled one of the earlier regulatory cases by paying Rs. 643 crore in fines, aiming to clear part of the regulatory overhang from the co‑location issue. However, final approval for the IPO remained pending.

2025 – Regulatory Challenges Persist: In early 2025, SEBI flagged fresh concerns regarding governance, internal processes, and ownership structures, particularly related to NSE’s stake in its clearing corporation, potentially delaying IPO approval by up to two years.

June–July 2025 – Final Settlement Push: NSE filed settlement applications with SEBI, offering around Rs. 1,388 crore to resolve the long‑running co‑location and dark fibre cases. SEBI’s acceptance of these applications has been seen as removing most of the major regulatory barriers to the IPO.

June 2025 – SEBI Signals Hurdles Cleared: SEBI Chairman Tuhin Kanta Pandey publicly stated that “no obstacle remains” in the way of NSE’s IPO after years of regulatory push‑and‑pull, indicating a breakthrough.

Late 2025 – Provisions Set Aside for Settlements: NSE recognised a provision of ~₹13.87 billion towards settling regulatory cases with SEBI — a key step toward closing the remaining regulatory issues ahead of listing.

Jan 2026 – SEBI NOC Nearing Completion: Regulators indicated that SEBI could issue the No Objection Certificate (NOC) very soon, possibly within January 2026, bringing the IPO process closer to launch. Once the NOC is granted, NSE plans to file its Draft Red Herring Prospectus (DRHP) and proceed toward listing.

Financials & Others

The National Stock Exchange (NSE) reported a 33% year-on-year (YoY) decline in consolidated profit after tax (PAT) for the September quarter of the fiscal year 2025-26 (FY26), with PAT falling to Rs. 2,098 crore from Rs. 3,137 crore in the same quarter last year.

However, after adjusting for a provision of Rs. 1,297 crore made towards settlement applications filed with the Securities and Exchange Board of India (SEBI) under the SEBI (Settlement Regulations) 2018, NSE’s adjusted PAT stood at Rs. 3,396 crore. This reflected a 16% sequential increase compared to the previous quarter.

NSE stated that the Rs. 1,297 crore provision, including interest, was recognised in Q2 FY26 in connection with settlement applications related to colocation and dark fibre matters. The exchange is awaiting a response from SEBI regarding these applications, and the final outcome remains uncertain at this stage.

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