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To fix the issue, NSE has filed a consent application with Sebi. The event on February 24 halted trading in both stocks and derivatives. NSE Clearing Ltd (NCL), NSE's subsidiary, has also submitted a similar permission application with Sebi.
Following the interruption, the NSE and NCL have already paid Rs 25 lakh each to the exchange's investor protection fund, according to the lawyer. According to persons familiar with the situation, NSE officials informed Sebi of the actions the exchange had taken to avoid such disruptions in the future.
The exchange performed a root-cause study and submitted it to Sebi's technical advisory committee. According to reports, the study determined that there was "no negligence or misgovernance" and that the error was caused only by "operational concerns." The NSE had said that on February 24, 2021, road construction work surrounding the Bandra-Kurla Complex (BKC) in Mumbai, where its headquarters is located, will impair data connection supplied by telecom service providers to the exchange.
There are ample roadblocks in NSE’s IPO path and the company has not yet taken clearance or moved to file its (draft red herring prospectus) DRHP.
Market veterans say NSE may have to take a back seat as Life Insurance Corporation of India (LIC) may sprint ahead with its initial offering.
Arun Kejriwal, founder of KRIS Investments, says NSE's IPO could be pushed back to fast-track the initial offer of LIC, which is the primary focus of the government. LIC's IPO has to happen in the current financial year and one should not be surprised if it knocks the door after the budget, he says. "This may postpone the IPO of NSE, maybe to the next financial year."
Unlisted shares of the National Stocks Exchange are available at Rs 3,800 apiece, which pushes the market capitalisation of the largest exchange in the country to Rs 1.5 lakh crore. Market players expect the NSE to command a valuation around Rs 2 lakh crore. This would make it another mega issue. The exchange may try to raise more funds than Paytm’s IPO, which was India's largest.
More than a decade after winning a legal claim of ₹856 crore against the National Stock Exchange (NSE) at the Competition Commission of India (CCI), the Metropolitan Stock Exchange of India (MSEI) is now seeking an out-of-court settlement into the matter, sources told BusinessLine.
The NSE is likely to have offered between ₹25 crore and ₹100 crore to settle the matter but a proposal of such a low amount is likely to face stiff resistance from MSEI shareholders, the sources said.
On a complaint from MSEI, the CCI, in 2011, held the NSE guilty of predatory pricing and monopolistic practices. But NSE challenged the CCI order in the Supreme Court (SC) and the final outcome of the award to MSEI has been pending since. Multiple adjournments and dates have been taken by the parties involved and the SC did not take up the case for hearing amid Covid backlog for nearly two years now. If the SC sticks to the award, the NSE will have to pay the same with interest, experts said.
So far, the NSE lacked any urgency to settle the matter as SEBI did not push the exchange. But NSE’s pending IPO could force it to get to the table with MSEI for a settlement, the sources said.