27 May 2025
The National Stock Exchange (NSE) is once again in the spotlight as its unlisted shares surged to a record high of Rs 2,100 on Monday, rekindling investor interest in its long-awaited public debut. This surge is largely driven by growing anticipation that the country's largest stock exchange may finally resolve regulatory hurdles that have been blocking its public offering.
According to a report by The Economic Times, the NSE is proposing a record settlement of Rs 10 billion (approximately $118 million) to resolve a long-standing co-location case with the Securities and Exchange Board of India (Sebi). This potential deal, which is still under consideration, could pave the way for the much-delayed IPO by securing a crucial no-objection certificate from the regulator.
Sebi had previously stalled NSE's IPO ambitions due to allegations from 2015 that certain high-frequency traders were given unfair access to its co-location servers. These allegations not only derailed NSE's IPO attempt in 2016 but also resulted in a six-month ban from the capital markets. In October, the exchange paid Rs 6.4 billion to settle one aspect of the case.
Signs of a broader regulatory thaw began to emerge last week when Sebi chairperson Tuhin Kanta Pandey stated that the regulator is “working closely” with the National Stock Exchange (NSE) to resolve all outstanding matters. “I can't provide a specific timeline, but it will be done soon. NSE and Sebi are in communication and addressing the issues,” he mentioned at a recent event. During the NSE's recent earnings call, CEO Ashish Kumar Chauhan noted that Sebi had identified four key areas requiring resolution before the IPO can proceed, including pending legal cases.
In the meantime, investors are not waiting idly. Market enthusiasm is spilling over into the grey market, where optimism about a post-settlement listing is driving a surge in activity for unlisted shares. This excitement is further boosted by recent marketing materials released by US-based Drew Investments, which is setting up a special purpose vehicle to invest in NSE at valuations ranging from ₹1,550 to ₹1,700 per share. According to Drew, the exchange's private valuation has increased from $36 billion in September to $50 billion now.
“The rise in NSE's unlisted share price reflects strong investor demand ahead of the IPO, with expectations of significant returns post-listing,” said Krishna Patwari, Founder and Managing Director of Wealth Wisdom India.
Patwari also highlighted the exchange's impressive year in primary markets. “NSE facilitated 268 IPOs in 2024 alone—90 on the main board and 178 in the SME segment—raising ₹1.67 lakh crore. That’s the highest number recorded in any calendar year,” he stated, emphasizing the growing confidence in India’s capital markets.
Financially, NSE continues to perform well. For the March quarter (Q4 FY25), it reported a consolidated net profit of ₹2,650 crore, representing a 7% year-on-year increase. However, revenue from operations dipped by 18% to ₹3,771 crore. The exchange also announced a dividend of ₹35 per share for FY25.
Nevertheless, experts caution that investing in unlisted shares carries risks. These include low liquidity, unclear valuations, and regulatory uncertainties. Delays in IPO clearance or shifts in Sebi's stance could disrupt expected returns.
The National Stock Exchange (NSE) is once again in the spotlight as its unlisted shares surged to a record high of Rs 2,100 on Monday, rekindling investor interest in its long-awaited public debut. This surge is largely driven by growing anticipation that the country's largest stock exchange may finally resolve regulatory hurdles that have been blocking its public offering.
According to a report by The Economic Times, the NSE is proposing a record settlement of Rs 10 billion (approximately $118 million) to resolve a long-standing co-location case with the Securities and Exchange Board of India (Sebi). This potential deal, which is still under consideration, could pave the way for the much-delayed IPO by securing a crucial no-objection certificate from the regulator.
Sebi had previously stalled NSE's IPO ambitions due to allegations from 2015 that certain high-frequency traders were given unfair access to its co-location servers. These allegations not only derailed NSE's IPO attempt in 2016 but also resulted in a six-month ban from the capital markets. In October, the exchange paid Rs 6.4 billion to settle one aspect of the case.
Signs of a broader regulatory thaw began to emerge last week when Sebi chairperson Tuhin Kanta Pandey stated that the regulator is “working closely” with the National Stock Exchange (NSE) to resolve all outstanding matters. “I can't provide a specific timeline, but it will be done soon. NSE and Sebi are in communication and addressing the issues,” he mentioned at a recent event. During the NSE's recent earnings call, CEO Ashish Kumar Chauhan noted that Sebi had identified four key areas requiring resolution before the IPO can proceed, including pending legal cases.
In the meantime, investors are not waiting idly. Market enthusiasm is spilling over into the grey market, where optimism about a post-settlement listing is driving a surge in activity for unlisted shares. This excitement is further boosted by recent marketing materials released by US-based Drew Investments, which is setting up a special purpose vehicle to invest in NSE at valuations ranging from ₹1,550 to ₹1,700 per share. According to Drew, the exchange's private valuation has increased from $36 billion in September to $50 billion now.
“The rise in NSE's unlisted share price reflects strong investor demand ahead of the IPO, with expectations of significant returns post-listing,” said Krishna Patwari, Founder and Managing Director of Wealth Wisdom India.
Patwari also highlighted the exchange's impressive year in primary markets. “NSE facilitated 268 IPOs in 2024 alone—90 on the main board and 178 in the SME segment—raising ₹1.67 lakh crore. That’s the highest number recorded in any calendar year,” he stated, emphasizing the growing confidence in India’s capital markets.
Financially, NSE continues to perform well. For the March quarter (Q4 FY25), it reported a consolidated net profit of ₹2,650 crore, representing a 7% year-on-year increase. However, revenue from operations dipped by 18% to ₹3,771 crore. The exchange also announced a dividend of ₹35 per share for FY25.
Nevertheless, experts caution that investing in unlisted shares carries risks. These include low liquidity, unclear valuations, and regulatory uncertainties. Delays in IPO clearance or shifts in Sebi's stance could disrupt expected returns.
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