NSE, the world’s largest derivatives exchange in terms of contracts traded, has Life Insurance Corporation of India (LIFI.NS), State Bank of India (SBI.NS), Canada Pension Plan Investment Board, a Tiger Global fund and a Morgan Stanley fund, among others as its core shareholders.
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New Delhi: The share listing plan of the National Stock Exchange of India’s (NSE) will not be approved by the Securities and Exchange Board of India (SEBI) until pending legal and regulatory cases involving the nation’s biggest bourse are resolved, Reuters reported quoting two sources familiar with the matter.
It said that the market watchdog has formed an internal view that due to the pending cases it won’t approve NSE’s application made last year for an IPO.’
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“Till the legal and regulatory issues are cleared there is no chance that SEBI will approve NSE’s IPO plans,” said one of the sources mentioned in the report.
The news of delay in NSE IPO will not be cheerful for its core shareholders that include banks, insurance companies and foreign funds who have reportedly been waiting for an exit opportunity in rising markets.
This IPO would allow NSE to have a broader shareholder base like its biggest competitor, BSE Ltd (BSEL.NS).
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It is for the first time SEBI’s wariness to approve NSE’s IPO has been previously reported. As per the Reuters report, NSE in 2016 had targetted offering 10 per cent of its total shares in a listing, and given the current ‘grey’ market valuation of 2 trillion rupees ($24.35 billion), the IPO size could be around $2.5 billion.
NSE, the world’s largest derivatives exchange in terms of contracts traded, has Life Insurance Corporation of India (LIFI.NS), State Bank of India (SBI.NS), Canada Pension Plan Investment Board, a Tiger Global fund and a Morgan Stanley fund, among others as its core shareholders.
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The stock exchange has been entangled in a long running case since 2016 related to equitable access to all its trading members. In an order dated April 2019, the market watchdog had faulted the exchange for not ensuring equitable access and fined it 11 billion rupees but the exchange challenged the order in the Securities Appellate Tribunal (SAT) a judicial authority.
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SAT, in January 2023, set aside some parts of the SEBI order and reduced the fine on the exchange but the matter was escalated by SEBI to the Supreme Court, which, on 21 March 2023, agreed to hear the matter.
As per a transcript of call uploaded on the NSE website, shareholders of the exchange sought clarity from the exchange on the likely timing of the public offering in an investor call in February following the SAT order. NSE CEO Ashish Chauhan said the matter is in the hands of the regulator.
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“There are many legal matters pending across many courts in the country which may or may not have any bearing on the IPO at all,” Chauhan said.
SEBI is still finalising orders in two other cases involving NSE apart from the ongoing case in the Supreme Court, said the source mentioned in Reuters report. The report also added that these cases include whether certain brokers made unfair gains due to preferential access to NSE’s trading systems and another lapse in NSE’s trading architecture.
