NSE IPO Clears Path? Exchange Offers Nearly Rs 1,300 Crore Settlement To SEBI To End Legal Battle

National Stock Exchange (NSE), the country’s largest stock exchange and the world’s most active derivatives platform, has offered $13.88 billion (Rs 1,300 Crore) to the Securities and Exchange Board of India (SEBI) to settle a legal battle that has delayed its plans for a public listing, according to a Reuters report citing three sources with direct knowledge of the matter.


Legal Hurdles Since 2019
The exchange has been embroiled in litigation with SEBI since 2019, when it was penalised $11 billion for failing to provide fair and equitable access to all its trading members—a violation that SEBI deemed serious enough to stall NSE’s IPO ambitions.

The NSE challenged the penalty in court, which ordered parts of SEBI’s ruling to be set aside. SEBI, in turn, appealed this at the Supreme Court.
Now, according to two of the sources cited in the Reuters report, NSE and SEBI are negotiating an out-of-court settlement. The proposal, if accepted, would still require the Supreme Court’s approval.

No-Objection Certificate in the Works
One source said SEBI is likely to grant a No Objection Certificate (NOC) for NSE’s IPO within three months, paving the way for a public listing.

“If all goes as per expected timelines, NSE's IPO could hit the markets before May next year,” said another source as mentioned in the report by Reuters.

SEBI has reportedly begun an inspection of the exchange’s systems, focusing on areas such as technology infrastructure, internal governance, and the process of appointing and compensating senior management. In February, SEBI flagged these concerns in a letter to NSE.

Read More - RBI Extends Call Money Market Hours to 7 PM from July 1 – Here’s Why

Stakeholders and Market Impact
Some of NSE’s largest shareholders include Life Insurance Corporation of India (10.72%), State Bank of India (7.76%), Morgan Stanley (1.58%), and the Canada Pension Plan Investment Board (1.60%)—all of whom are expected to benefit from the public offering, as per a report by reuters.

The exchange has been attempting to go public since 2016 to facilitate investor exits, but regulatory scrutiny has consistently delayed those plans.
Its main domestic rival, BSE Ltd, was successfully listed in 2017.

Silence from Key Players
Both NSE and SEBI declined to comment when approached by Reuters. All three sources spoke on condition of anonymity as they were not authorized to speak to the media.
If the proposed $13.88 billion settlement is accepted and regulatory and court approvals fall into place, India could witness one of its most anticipated IPOs —an event that could reshape the capital markets landscape and boost investor confidence in the regulatory climate.