Home / Market / Stock-market-news /  NSE’s listing plans remain uncertain

India’s biggest stock exchange is yet to firm up its plans to go public, three months after forming a listing committee to consider an initial public offering (IPO) of shares.

The listing committee of the National Stock Exchange of India Ltd (NSE), which has held three meetings so far, will go back to the market regulator to highlight its concerns, particularly over cross-listing on rival BSE Ltd, said three people familiar with the development.

The listing committee, formed on 26 February, is yet to submit recommendations to NSE’s Stakeholders Relations Committee (SRC) for review. These recommendations would later need to be approved by the NSE board.

“After the third meeting of the listing committee, the listing committee chairman suggested that the committee should meet Securities and Exchange Board of India (Sebi) once to understand the regulator’s position on self-listing and restructuring," said one of the people cited above, all of whom spoke on condition of anonymity.

“NSE is seeking self-listing or listing on BSE under independent regulation, not regulated by BSE," the person said. The most recent meeting of the committee was held on 12 May.

Another of the people cited above confirmed that Sebi will meet the NSE listing committee towards the end of the month. “A meeting has been requested with Sebi. Only after this meeting will the listing committee be able to meet and hopefully give its recommendations," he said.

An NSE spokesperson, in an email, said the listing committee had completed a few meetings and discussions had been constructive.

The formation of the listing committee had been seen as a signal of the exchange’s willingness to move towards an eventual listing despite reservations over the need for cross-listing.

Shareholders of the exchange, who are looking for an exit opportunity through the IPO, say the progress made by the committee is underwhelming.

“Formation of the listing committee was a step in the right direction. Shareholders had taken this in the right spirit and said that they are happy to take this forward. However, several shareholders are underwhelmed with the way the committee has functioned," said the third of the people cited earlier, a shareholder in the exchange.

The committee’s insistence on pushing for a self-listing would just delay the entire IPO process, this person said.

“Several shareholders have already met Sebi. Public sector shareholders, too, have met Sebi. The regulator has already written to NSE on self-listing so we don’t know what is the need to meet Sebi again," he said.

According to a 5 May report by PTI, Sebi had written to the NSE clarifying that the present regulations do not provide for the self-listing of a stock exchange.

On 1 January, Sebi issued a notification regarding the amendments to the Stock Exchanges and Clearing Corporations (SECC) rules which stated that “... a recognized stock exchange may apply for listing of its securities on any recognized stock exchange, other than itself and its associated stock exchanges".

NSE has maintained that it would either want a self-listing or a structure that ensures the competing exchange does not have regulatory oversight on it.

“It (listing committee) will take their (shareholders) assurances to support the NSE’s principled stand that an exchange should continue to be regulated by an appropriate regulator only and not by competitors," NSE said in a statement dated 26 February.

In response to a Mint query on whether NSE will proceed with the listing process if Sebi doesn’t consider amending the SECC regulations, an NSE spokesperson said it cannot comment on it at this stage.

“We cannot comment on regulator’s possible views on any subject. At this point all other scenarios are hypothetical; thus it may not be fair to comment," he said.

Several shareholders have been demanding that an application for in-principle approval for the listing be filed with Sebi by 30 June.

“In-principle approval doesn’t take much time. BSE has already gone ahead and done that. So as a first logical step shareholders have been seeking for an in-principle approval to be applied for by 30 June," said the second of the three people cited earlier.

BSE may look to launch an IPO of up to 800 crore this fiscal year, Mint reported on 30 March.

The exchange’s pursuit of self-listing can delay the process, said a market participant.

“Pushing for a provision that is not provided for in the regulations is more on the lines of possibly delaying the listing process. On the one hand, by forming the listing committee, the exchange is keeping its shareholders happy, and on the other hand, by ensuring that the committee is mirroring the management’s thought process on the clause of self-listing (which has not been provided for in regulations), NSE’s seriousness to get listed can be questioned," said Arun Kejriwal, director of Kris Securities Ltd.

On Tuesday, Mint reported that State Bank of India (SBI) had put a 5% stake in NSE on sale and called for interested buyers to bid. SBI, together with its subsidiary SBI Capital Markets, is the largest shareholder in the exchange, in which it holds a 15% stake.

Other prominent shareholders include Life Insurance Corporation of India, Goldman Sachs Group Inc., Tiger Global Holdings and Citigroup Strategic Holdings Mauritius.

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