NSE IPO: Markets regulator Sebi clears NSE IPO after years of delays, listing process set in motion

India’s largest stock exchange has moved a decisive step closer to the public markets. The Securities and Exchange Board of India (SEBI) has granted its no-objection certificate (NOC) for the long-awaited initial public offering of the National Stock Exchange (NSE), clearing a major regulatory hurdle that has held up the listing for years, according to ET Now.

While NSE has not yet issued a formal announcement, SEBI’s clearance signals that the exchange can now begin formal preparations for its IPO, including finalising the offer structure and engaging with advisers. The approval comes after prolonged regulatory scrutiny and a series of governance reforms undertaken by the exchange to address concerns raised by the market regulator.

Earlier reports from Reuters indicated that the government has approved a 2.5% dilution of its stake in NSE, with an official notification expected shortly. NSE is reportedly planning to file its draft red herring prospectus (DRHP) by the end of March and is in discussions with investment banks and law firms to firm up the prospectus and gauge investor demand.

Confirming the next steps, NSE Managing Director and Chief Executive Officer Ashish Chauhan said the exchange would begin work on the DRHP once it receives the official NOC from SEBI. “Once the NOC from SEBI is received in reality and in paper, we will start working on our DRHP,” Chauhan told news agency ANI.

He added that preparing the DRHP and associated documentation, including papers related to an offer for sale (OFS), would take about three to four months. The entire IPO process, from regulatory approvals to listing, could take eight to nine months. Chauhan said a definitive timeline would only be shared after the formal NOC is in hand.

SEBI Chairman Tuhin Kanta Pandey had earlier said that the regulator was at an advanced stage of issuing the NOC for NSE’s IPO, reinforcing expectations that the long-stalled listing was finally back on track. The in-principle approval is being seen by market participants as a strong signal that regulatory roadblocks have largely been addressed.

The NSE IPO has been in limbo for nearly a decade. The exchange first filed its DRHP in December 2016, but the listing was put on hold after SEBI launched investigations into serious governance lapses, most notably the co-location controversy. The regulator had found that certain brokers allegedly received preferential access to NSE’s trading systems, giving them an unfair advantage in high-frequency and algorithmic trading.

These issues were treated as significant violations of market fairness and integrity, prompting enforcement action and halting the IPO process. Since then, NSE has overhauled its governance framework, strengthened internal controls and worked closely with regulators to resolve outstanding concerns.

With SEBI’s no-objection now in place, the clearing of regulatory uncertainty could unlock one of India’s most anticipated listings, marking a milestone not just for NSE but for the broader capital markets ecosystem.