NSE Q1 profit up 11%; SEBI clears ₹1,429-crore co-location settlement in principle

National Stock Exchange (NSE) on Thursday reported a 6.7% year-on-year rise in consolidated net profit for the quarter ended June 30, 2026. The NSE also said that the Securities and Exchange Board of India (SEBI) has granted in-principle approval to a ₹1,429.41-crore settlement in the long-running co-location case.

Consolidated net profit for the June quarter stood at ₹3,120.08 crore, compared with ₹2,923.85 crore in the corresponding period last year. Revenue from operations rose 13.1% to ₹4,560.41 crore from ₹4,032.24 crore, while total income increased 9.5% to ₹5,252.17 crore. Profit before tax climbed 10.4% to ₹4,169.48 crore from ₹3,775.99 crore a year ago.

SEBI gives in-principle nod to settlement

In a key regulatory development, NSE said SEBI, through a letter dated July 30, 2026, had conveyed its in-principle approval to accept the terms of the settlement proposed by the exchange in the co-location matter.

The exchange said it has made a demand draft of ₹714.70 crore, in addition to the ₹714.70 crore already deposited with SEBI, taking the total settlement amount to ₹1,429.41 crore. The settlement will be completed after the regulator's final formalities are concluded.

"SEBI vide its letter dated July 30, 2026 has in-principle agreed to accept the terms of the settlement that was made a demand draft of ₹714.70 crore, in addition to the deposit of ₹714.70 crore made by NSE with SEBI, which will be adjusted towards the settlement amount," NSE said in the filing.

The disclosure marks one of the most significant developments in the decade-old regulatory case that has weighed on the country's largest stock exchange and remained a key overhang on its long-awaited public listing plans.

Strong operating performance

NSE's operating performance remained robust during the quarter, aided by higher trading activity across segments.

Total expenses rose to ₹1,172.03 crore from ₹1,052.64 crore a year earlier, indicating increases in employee benefit expenses, regulatory fees and other operating costs. Despite the rise in expenditure, the exchange maintained healthy profitability, supported by strong growth in operating revenue.

On a standalone basis, revenue from operations increased to ₹4,056.47 crore from ₹3,680.72 crore in the year-ago quarter, while net profit rose to ₹2,628.22 crore from ₹2,446.55 crore.

What is the co-location case?

The co-location case traces its origins to 2015, when whistleblower complaints alleged that certain brokers were able to gain preferential access to NSE's trading systems through its co-location facility.

The allegations centred on the exchange's tick-by-tick (TBT) data dissemination architecture, with some brokers allegedly receiving market data fractions of a second ahead of others by connecting to servers that processed information first. Even millisecond-level advantages can be important in high-frequency trading, potentially allowing firms to execute orders ahead of competitors.

SEBI subsequently launched multiple investigations into the exchange's server allocation practices, governance standards and market infrastructure. Over the years, the regulator passed several orders against NSE and certain former officials, while the matter also saw proceedings before the Securities Appellate Tribunal (SAT) and the Supreme Court.

NSE has maintained that there was no evidence of deliberate wrongdoing or unfair access granted by the exchange. It opted for the settlement route after making provisions in its books for the case. With SEBI now granting in-principle approval to the proposed settlement, the long-running regulatory dispute appears to be nearing closure, although the settlement process is yet to be formally completed.