NSE IPO: SEBI chairman Tuhin Kanta Pandey updates on stock exchange’s listing

NSE, the country’s largest stock exchange, has been trying for around nine years to kickstart its much-awaited initial public offering (IPO) process but has been delayed due to several regulatory hurdles. In a fresh development, the capital market regulator Securities and Exchange Board of India (SEBI) has signaled that the regulator will review NSE’s IPO proposal.

The new SEBI chairman Tuhin Kanta Pandey, in his first board meeting as the head of the watchdog, confirmed that the regulator will assess the issues surrounding the NSE’s IPO proposal. “We will look into the issues around it (NSE IPO) and apply our mind to take it forward,” Pandey told reporters while speaking to the media post the meeting. 

The IPO of NSE is long-awaited as its first attempt to list its shares in 2016 was derailed after the bourse got embroiled in the co-location controversy. The NSE had initially filed its IPO document with the SEBI in December 2016, and was reportedly looking to raise around ₹10,000 crore. Existing shareholders of NSE such as American investor Tiger Global Management, Aranda Investments, SAIF Partners, Norwest Venture Partners, Citigroup Strategic Holdings, Goldman Sachs, State Bank of India, and others were expected to be diluting a 23% stake in the exchange through an offer for sale.

The DRHP was filed at a time when the company was looking for a new managing director after the sudden exit of then MD & CEO Chitra Ramkrishna. Chitra had stepped down from her post amid allegations of misuse of its co-location facility and giving some of the traders preferential access to trade data.

In July 2022, the Securities and Exchange Board of India (SEBI) appointed Ashish Kumar Chauhan as MD & CEO of NSE for a period of five years. This was his second stint at NSE after working at BSE (formerly Bombay Stock Exchange) as CEO between 2009-2022. A technocrat from the IIT-Bombay and alumnus of the IIM-Calcutta, Chauhan first joined the NSE in 1993, when the bourse was being set up as a counterweight to the Bombay Stock Exchange (BSE). During his years with the BSE, the bourse successfully completed the IPO in 2017, which got oversubscribed 51 times with close to 12 lakh applications.

Last year, in a media interaction, CEO Ashishkumar Chauhan had said that the NSE was ready to file draft red herring prospectus (DRHP) for its IPO, but awaited a signal from the market regulator. “The regulator (SEBI) has to give approval for the IPO. Once they give the approval, we’ll submit a revised DRHP,” Chauhan had said.

For the July-September quarter of FY25, the NSE reported a consolidated net profit of ₹3,137 crore, growing by 57% year-on-year basis from ₹1,999 crore in the corresponding period of the previous fiscal. The net profit margin for the second quarter ended September 30, 2024, stood at 62%.

The domestic bourse posted consolidated total income of ₹5,023 crores for Q2 FY25, registering a growth 25% on a year-on-year basis, aided by rise in trading revenue. Apart from trading revenue, the revenue from operations was also supported by other revenue lines, including clearing services, data centre & connectivity charges, listing services, index services and data services.

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