SEBI Clears NSE IPO Path; India’s Largest Exchange Eyes Listing in 2026
- 31st January 2026
- 12:00 AM
- 5 min read
Summary
The National Stock Exchange has received a long-awaited regulatory clearance to proceed with its initial public offering, ending nearly a decade of uncertainty around its listing plans. With the key approval in place, the exchange can now begin formal preparations for filing its IPO documents, even as pending settlement processes continue in parallel.Mumbai | January 31
India’s largest stock exchange, the National Stock Exchange of India, has received a crucial regulatory clearance to move ahead with its long-pending initial public offering (IPO), marking a significant milestone after years of delays linked to regulatory and legal proceedings.
According to people familiar with the development, the market regulator, the Securities and Exchange Board of India, has issued a no-objection certificate (NOC) to the exchange, allowing it to initiate the IPO filing process. The approval was granted by SEBI’s department overseeing market infrastructure institutions, a mandatory requirement for stock exchanges, clearing corporations and depositories before they approach the capital markets.
SEBI approval allows NSE to begin IPO filing process
With the NOC in hand, NSE can now formally engage merchant bankers, legal advisors and other intermediaries to begin preparing its draft red herring prospectus (DRHP).
People tracking the process said the exchange is expected to take a few months to finalise its filing, with the IPO itself likely to hit the market in around 8–9 months, subject to regulatory timelines.
The proposed IPO is expected to be an offer for sale (OFS), meaning no fresh capital will be raised by the exchange. Existing shareholders are likely to dilute a part of their holdings through the public offering. NSE does not have a promoter, and its shareholding is spread across domestic and foreign institutions, public sector entities and other strategic investors.
A decade-long listing journey
NSE had first sought to go public in 2016, but the plan was put on hold amid regulatory scrutiny and legal proceedings related to its co-location and dark fibre matters. Over the years, the listing process remained stalled as SEBI pursued enforcement actions and the exchange challenged certain orders before appellate forums.
While some penalties were modified by the Securities Appellate Tribunal (SAT), parts of the dispute continued, eventually reaching the Supreme Court. The regulatory uncertainty surrounding these cases had been one of the key hurdles preventing NSE from proceeding with its IPO.
Settlement process still underway
People familiar with the matter said the NOC has been issued even as the settlement process related to the co-location and dark fibre cases is yet to reach formal closure. The exchange had filed a settlement application with SEBI in June 2025, seeking to resolve the long-running issues under the regulator’s consent mechanism.
As part of the proposed settlement, NSE has already made provisions of over ₹1,300 crore in its financials, in addition to amounts previously deposited with the regulator. The final settlement amount may vary, as interest is expected to be applied until the date of completion, according to people aware of the discussions.
The settlement proposal is expected to be placed before SEBI’s internal committees and subsequently before a high-powered advisory panel, followed by approval from the regulator’s whole-time members. After this, SEBI is expected to seek withdrawal of the pending case before the Supreme Court, which would formally close the matter.
Why SEBI cleared the IPO path now
Market participants noted that SEBI’s decision to issue the NOC reflects the regulator’s comfort with the direction of the settlement process, even though final approvals are still pending. The approval also signals a broader push to resolve legacy issues around market infrastructure institutions and bring greater transparency through public listings.
Under SEBI rules, exchanges must disclose any pending regulatory or legal matters in their offer documents, and experts said NSE is expected to make appropriate disclosures in its DRHP, if required.
Valuation and offer size
Based on recent transactions in the unlisted market, NSE’s valuation is estimated to be in the range of ₹5–5.5 trillion, making it one of the largest listings in India’s capital market history.
Under SEBI’s current minimum public shareholding norms, companies with such a large post-issue market capitalisation are permitted to dilute as little as 2.5% of equity initially.
At current valuations, even a small stake sale could translate into a sizeable offer, potentially running into tens of thousands of crore rupees, according to market estimates.
What happens next
Experts expect NSE to begin formal banker pitches shortly, followed by appointment of lead managers and initiation of the IPO filing process. From DRHP filing to final approval and listing, the process typically takes several months, depending on regulatory review timelines and market conditions.
For the capital markets, NSE’s listing is seen as a landmark event, given the exchange’s dominant position across equity cash, derivatives and clearing businesses. While the IPO does not bring fresh capital into the exchange, it is expected to improve transparency, governance scrutiny and public participation in one of India’s most critical market institutions.
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