National Stock Exchange IPO: Greenlight likely soon with riders


National Stock Exchange IPO may finally be greenlighted by market regulator SEBI, said a report by Moneycontrol. India’s leading stock exchange approached SEBI late last year with firmed up plans of listing itself following failed attempts earlier. The report added that a regulatory go ahead, while likely, will come with riders and disclosures.

SEBI may ask NSE to include information and status of all the ongoing cases in the draft red herring prospectus (DRHP). The step will help investors in taking an informed decision.

“The exchange will need to furnish all details of co-locations cases, including Escrow account where co-locations income is parked. Then it is for investors to decide whether they want to invest or not,” a source said.

NSE has been accused of preferring some brokers between 2011 and 2014 by allowing them to place their servers at the same location as NSE’s algorithmic trading servers. This offered an unfair advantage to the selected brokers. A subsequent SEBI probe found NSE guilty and barred it from capital markets for six months, starting April 2019.

The regulator also asked the exchange to deposit the revenue from its co-location service in an Escrow account. This amount is expected to have swelled to INR2,500 crore (INR25 billion). SEBI also directed the exchange to make a payment of around INR625 crore as well as interest at the rate of 12% per annum in the case.

Despite making these provisions, NSE is not out of woods as separate investigations from Central Bureau of Investigation (CBI) and Income Tax department are still going on.

National Stock Exchange IPO: Last, not the least

In recent years, Indian capital markets have seen listings of several stock and other exchanges. While Multi Commodity Exchange (MCX) debuted in 2012, NSE rival Bombay Stock Exchange (BSE) got listed in January 2017. Earlier this year, National Commodity Derivative Exchange (NCDEX) filed its IPO application and received regulatory approvals in April. This means NSE will be among the last of exchanges to get listed.

Nevertheless, National Stock Exchange IPO will be among the biggest public offers in India. According to trends in the grey market, shares of the exchange are traded at INR950 apiece, effectively valuing it at INR50,000 crore.  These pre-IPO rates indicate a decline from the levels of INR1,050 just a few months back.


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