NSE moves closer to IPO as Sebi agrees to ₹1,491.21 crore settlement in co-location case

The National Stock Exchange of India (NSE) has moved a step closer to launching its long-awaited initial public offering (IPO) after the Securities and Exchange Board of India (Sebi) gave its in-principle approval to settle the long-pending co-location and dark fibre cases.

In a statement issued on July 30, the exchange said Sebi has agreed to a settlement amount of ₹1,491.21 crore. This includes ₹714.74 crore to be paid by the NSE, while ₹776.47 crore that the exchange had earlier deposited with the regulator will be adjusted against the total settlement amount. The NSE's board approved the payment at its meeting on Thursday.

"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 settlement marks a significant milestone in resolving one of the longest-running regulatory disputes involving the exchange. The co-location and dark fibre investigations, which date back to 2015, had remained a key hurdle to the NSE's listing plans.

With the settlement now in place, the exchange has removed a major regulatory overhang, paving the way for progress on its proposed IPO.

Industry sources told Fortune India that the NSE is targeting a September launch for its IPO, with the issue size expected to be around ₹30,000 crore. The offering is likely to value India's largest stock exchange at over ₹5 lakh crore, and investor roadshows are expected to commence shortly.

According to the draft red herring prospectus (DRHP) filed with Sebi in June, the proposed IPO will be entirely an offer for sale (OFS) comprising 14.89 crore equity shares, with existing shareholders collectively diluting nearly 6% of NSE's equity. The exchange currently has around 1.8 lakh shareholders.

Among the selling shareholders, State Bank of India (SBI) will offload up to 2.48 crore shares, making it the largest seller in the issue. It will be followed by MS Strategic (Mauritius), which plans to sell around 1.6 crore shares, and the Canada Pension Plan Investment Board (CPPIB), which will divest nearly 1.19 crore shares.

Other prominent investors participating in the OFS include Aranda Investments (Mauritius), which will sell about 1.12 crore shares, while Bank of Baroda and Stock Holding Corporation of India will each offload around 1.1 crore shares. Public sector insurers are also trimming their holdings, with General Insurance Corporation of India (GIC Re) and New India Assurance each offering more than one crore shares, while National Insurance Company and United India Insurance Company will each sell around 60 lakh shares.

Notably, Life Insurance Corporation of India (LIC), one of NSE's largest shareholders, has decided not to participate in the IPO.

As per the DRHP, 50% of the net offer has been reserved for qualified institutional buyers (QIBs), 15% for non-institutional investors (NIIs), and the remaining 35% for retail investors. Additionally, up to 5% of the post-offer paid-up equity share capital has been reserved for eligible employees.