No NOC request for NSE IPO, says Sebi

The National Stock Exchange (NSE) has not submitted a new request for permission to be listed, causing a delay in its initial public offering (IPO). The regulator, the Securities and Exchange Board of India (SEBI), clarified that the delay is due to the NSE, not the regulator. The NSE submitted its draft red herring prospectus in 2016, which was returned by Sebi in 2019 and advised to be resubmitted after resolving an investigation. In 2022, NSE sought Sebi’s approval for listing, but Sebi responded with comments on various aspects and did not receive an explicit request for the listing no-objection certificate until May of the same year. Sebi also clarified that it did not set a condition for NSE to be glitch-free for a year as reported in the media.

Sebi requested the court to dismiss a plea seeking to expedite NSE’s IPO, arguing that it is inappropriate to direct a statutory regulator on how to perform its duties and make decisions. Additionally, Sebi refused to disclose information on its investigations, stating that it can adversely affect the market, and competitive position, and benefit third parties. It added that the petition by People Activism Forum was an ‘act of outsider to derail regulatory proceedings’.

In the latest earnings call for the June quarter, NSE’s managing director and chief executive officer Ashishkumar Chauhan told analysts that there was no clarity on its IPO. NSE also urged the market regulator to revisit its stance of allowing it to go public and stated that most of the litigation matters were on the verge of concluding. NSE assured that it has been compliant with all disclosure guidelines laid down by Sebi.

Experts suggested that NSE may have to submit a fresh request for obtaining the no-objection certificate with updated information on governance and financials. The Delhi High Court may hear the writ petition in December this year. The shares of NSE in the unlisted market have been trading at around 6,200 apiece, nearly doubling from its levels a year ago, while the prices have cooled down from around 6,500 levels it had touched in May. The exchange announced a bonus issuance last quarter, for which shareholder approval has been obtained but Sebi’s nod is still awaited. For the June quarter, NSE reported 39% year-on-year growth in the consolidated profit to around 2,567 crore led by a 51% surge in revenues from operations to around 4,510 crore.

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