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Business News/ Markets / Stock Markets/  NSE IPO: SEBI lays down conditions to launch IPO, here’s all you need to know

NSE IPO: SEBI lays down conditions to launch IPO, here’s all you need to know

The market regulator has asked the National Stock Exchange to remain glitch-free for at least a year, enhance its technological infrastructure, improve the corporate governance structure and resolve pending legal matters.

NSE IPOPremium

Indian investors are eagerly waiting for the initial public offering (IPO) of the National Stock Exchange (NSE). However, the market regulator has imposed several terms and conditions for its proposed public offering.

According to a report by CNBC TV-18, the Securities and Exchange Board of India (Sebi) has asked the NSE to remain glitch-free for at least a year, enhance its technological infrastructure, improve the corporate governance structure and resolve pending legal matters.

In January 2020, the NSE announced that it had initiated discussions with Sebi regarding its IPO and expressed optimism about unveiling the public issue by September, pending necessary approvals. 

The stock exchange rekindled its listing aspirations, which had been temporarily sidelined due to a Sebi investigation into alleged misconduct involving the exchange and some of its senior officials. The investigation focused on accusations that the exchange misappropriated its co-location facility and provided preferential access to specific trading members.

The listing of NSE has been postponed for several years due to a series of corporate governance issues. These concerns include the involvement of its former chief executive officer Chitra Ramkrishna in the 2015 co-location scam and problems related to various technological failures. 

In 2021, the NSE faced a trading suspension for several hours when its mainframe and disaster recovery sites experienced malfunctions, attracting scrutiny from Sebi.

"Going ahead, as the number of investors in India doubles or triples from 7.5 crore currently, Sebi needs to have confidence in our processes, technology and intentions. As and when SEBI becomes more comfortable, they will tell us to apply (for IPO) and we will go ahead," Ashishkumar Chauhan, managing director and chief executive officer at NSE, said earlier this year.

As of September 30, the shareholding pattern revealed that the NSE's non-public ownership amounted to 44.03 percent, slightly below the designated threshold of 49 percent. Meanwhile, public holdings constituted 55.97 percent, surpassing the mandated minimum of 51 percent. In the latest proposed auction, NSE's shares were valued at 3,150.

For the September quarter, the NSE disclosed a robust 13 percent year-on-year growth in consolidated net profit, reaching 1,999 crore. The consolidated income from operations also experienced a substantial increase, standing at 3,652 crore, marking a 24 percent surge from the corresponding period last year.

In addition to trading, various revenue streams, including listing, index services, data services, and the co-location facility contributed to the positive performance of NSE's overall financials, as stated by the exchange.

In December 2016, the NSE submitted preliminary documents to Sebi for its IPO. The anticipated proceeds from the IPO were estimated to be 10,000 crore. The IPO was structured as a comprehensive offer-for-sale (OFS), with existing shareholders intending to divest NSE's shares.

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Published: 18 Dec 2023, 05:20 PM IST
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