NSE IPO: Sebi agrees ‘in-principle’ to settlement plea; path clears for long-awaited listing

The Securities and Exchange Board of India (Sebi) has “in-principle” agreed to the settlement plea filed by the National Stock Exchange (NSE) in the long-running unfair market access case, a development that could finally clear the regulatory hurdle for the country’s largest stock exchange to launch its much-delayed initial public offering (IPO), reported PTI.Sebi chairman Tuhin Kanta Pandey said the settlement application submitted by NSE is currently being examined by multiple committees within the regulator, but noted that the regulator is broadly aligned with the proposal.“The settlement application (from NSE) is in process with different committees (of Sebi), but in principle, we agree on the settlement,” Pandey told reporters on the sidelines of an AIBI event here.The settlement is a key step in NSE’s effort to secure a no-objection certificate (NOC) from Sebi for its IPO. Pandey had earlier indicated that the NOC could be issued within about a month.NSE has been attempting to go public since 2016, but its plans were stalled due to the co-location case, in which certain brokers were accused of receiving preferential access to the exchange’s trading systems. After years of litigation, NSE offered in 2025 to pay Rs 1,388 crore to settle the charges and move ahead with the listing process.The proposed IPO is expected to be among the largest in India’s capital markets.

IPO timeline and stake sale flexibility

Pandey also said that the government has approved a proposal allowing large companies to sell as little as 2.5% stake in an IPO. Sebi had last year reduced the minimum public offer threshold from 5% to 2.5% for companies valued at over Rs 5 lakh crore — a change seen as benefiting entities such as NSE and Reliance Jio.However, the Sebi chief declined to comment on the high demand for NSE shares in the unlisted market, stating that the issue falls under the Ministry of Corporate Affairs. This comes amid indications that the exchange could soon receive its IPO-related NOC.Reacting to the development, NSE managing director and chief executive Ashish Kumar Chauhan described the in-principle approval as a positive signal, though he said no formal communication had been received yet.“… Once we receive that, we will of course have to follow whatever is there in the intimation. Once we get the NOC, we will start preparing for (filing) the draft red herring prospectus (DRHP),” Chauhan told PTI Videos after casting his vote in the civic polls, PTI quoted.Chauhan said it would take up to four months after receiving Sebi’s NOC to file the DRHP, which would then need to be cleared by the regulator. The IPO itself could hit the markets around seven to eight months after the NOC.“I still think after NOC, 7-8 months (for the IPO). If we can expedite that, we will try to do that,” he said.

Sebi flags disclosure gaps in IPO documents

Separately, addressing investment bankers at the event, Pandey flagged continuing concerns over disclosure standards in public issue documents. He said Sebi continues to see “recurring disclosure gaps” that undermine transparency and investor understanding.Sebi inspections have found that due diligence is not always independent and, in some cases, relies excessively on issuer undertakings, he said, stressing the need for independent verification of projections related to working capital and capital expenditure.He reminded investment bankers that they are the “first line of disclosure integrity”, responsible for ensuring that offer documents are clear, complete and verifiable with respect to business details, risks, governance and use of funds.According to Pandey, gaps in disclosures often lead to regulatory queries and prolong fundraising timelines for companies. He said capital structure disclosures must clearly spell out past fundraises, preferential allotments and changes in control, particularly when they occur close to an IPO.“We also expect greater Business Model clarity, with transparent revenue and cost drivers,” he said, adding that management discussion and analysis sections should go beyond narration and explain the internal and external factors influencing performance.