The NSE has been seeking IPO approval from SEBI since 2016
| Photo Credit:
FRANCIS MASCARENHAS

The National Stock Exchange (NSE), is asking the finance ministry to intervene in a years-long standoff with the Securities and Exchange Board of India (SEBI),  over its planned IPO, three sources with direct knowledge of the matter said.

NSE, the world’s largest derivatives exchange, has been trying to go public since 2016 but has failed to secure regulatory approval due to pending legal cases and governance shortfalls. Its main domestic rival BSE Ltd is listed.

Its decision to ask the government to intervene marks an escalation in the rare standoff between India’s largest exchange and its markets regulator. An IPO, if cleared, would help large investors in the exchange including Life Insurance Corporation of India, State Bank of India, Morgan Stanley and Canada Pension Investment Plan Board find an exit after years.

NSE’s letter to the finance ministry requesting assistance came after its latest application in March to secure a ‘no objection certificate (NOC)’ from the SEBI was not cleared, according to the sources who asked not to be identified because they were not authorised to speak with media.

The exchange had made similar requests in November 2019, twice in 2020, and again in August 2024.

NSE, SEBI and the finance ministry did not respond to emailed requests for comment.

“The letter requests the Ministry of Finance to engage with the newly appointed SEBI Chairman to address and resolve the concerns raised by SEBI regarding NSE’s pending public offer,” one source said.

NSE’s appeal to the government has not been previously reported.

Tuhin Kanta Pandey, who became SEBI chairman in March, last month had said the regulator was working to resolve issues surrounding NSE’s public offer but will not allow commercial interests to take precedence over the general public interest.

“Different departments at SEBI had raised concerns,” a second source said. “Until all departments are satisfied that issues have been addressed, an NOC is unlikely to be issued.”

One of the key concerns flagged by SEBI is on governance shortfalls at the exchange, including a delay in appointing a chairman to its board. NSE, in its letter to the finance ministry, dismissed those concerns and blamed SEBI for a delay in approving a candidate it recommended for chairman in 2022.

SEBI had also raised concerns about NSE’s process of appointing top management. NSE told the ministry its processes are compliant with SEBI rules, according to the letter.

NSE’s letter also questions the regulator’s “neutrality” in recent decisions which have hurt its business interests more than those of competitor BSE, citing certain SEBI decisions on new rules for the futures and options market.

NSE also questioned a recent SEBI proposal asking exchanges to disinvest their holdings in clearing corporations. This could raise costs and undermine market stability, the exchange told the government in its letter.

Published on May 8, 2025