After nearly a decade-long wait, the NSE IPO appears to be on the brink of its long-delayed initial public offering (IPO). Multiple developments in May 2025 signal that regulatory hurdles may finally be lifting, as the Securities and Exchange Board of India (SEBI) and NSE engage in advanced discussions to resolve the infamous co-location case through a consent settlement.
This progress, if realized, would end one of the most closely watched IPO stalemates in India’s corporate history and unlock investor value in what is arguably India’s most anticipated public listing.
NSE IPO Journey Since 2016
NSE had originally filed its draft red herring prospectus (DRHP) in 2016, intending to raise INR 10,000 crore through an offer for sale (OFS). However, the plans were soon derailed by the co-location and algorithmic trading scandal, triggering intense scrutiny and regulatory action. SEBI accused NSE of providing unfair preferential access to certain high-frequency traders (HFTs) between 2010 and 2014 via faster “dark fibre” connectivity — a serious breach of market fairness.
SEBI’s 2019 order directed NSE to disgorge INR 625 crore with 12% annual interest and barred its executives from market roles. Although a Securities Appellate Tribunal (SAT) order in 2023 gave partial relief by ruling out fraud, it still did not greenlight an IPO.
NSE IPO: SEBI Reconsiders NSE Co-Location Settlement
According to some industry reports, SEBI and NSE have reopened consent settlement talks, with two main options on the table:
- Conditional No-Objection Certificate (NoC): SEBI may issue the NoC with conditions such as enhanced disclosures of pending litigations in the DRHP and recognition of contingent liabilities.
- Out-of-Court Settlement: NSE could agree to a financial settlement with SEBI — reportedly around INR 1,200 crore, nearly double the amount paid in the earlier Trading Access Point (TAP) case — in exchange for withdrawal of the co-location cases.
NSE has formally expressed willingness to settle all pending matters through a consolidated consent application. Its Governing Board has approved exploring this mechanism, reinforcing the exchange’s intent to push forward with the IPO process.
The settlement, if finalized, would still need the Supreme Court’s approval to officially close the litigation chapter.
SEBI’s Cautious Green Light
SEBI Chairman Tuhin Kanta Pandey recently signaled optimism, stating:
“We are not opposed to NSE’s listing. But when you’re talking about listing India’s systemically critical exchange, governance cannot be compromised. It’s not about delay — it’s about due diligence.”
His remarks underscore the regulator’s dual challenge: ensuring market integrity while also enabling capital market development. Over the years, SEBI has flagged four core concerns:
- Technology & Resilience: NSE’s past trading outages raised concerns about its operational preparedness.
- Governance Standards: SEBI demanded more than “check-the-box” compliance, focusing on board independence and accountability.
- Pending Litigation: Full legal closure of co-location-related cases was a precondition for IPO approval.
- Clearing Arm Independence: NSE’s 100% ownership in NSE Clearing Corporation (NCL) raised concerns about conflict of interest.
In response, SEBI proposed financial unbundling — suggesting that NCL should become financially independent, perhaps by directly collecting fees from brokers instead of relying on revenue-sharing with NSE.
Stakeholder Pressures and Market Expectations
The delay in NSE IPO has created increasing discontent among institutional investors. Life Insurance Corporation (LIC), SBI, Stock Holding Corporation of India, and several public sector insurers hold significant stakes. Many of these long-term investors are keen to partially monetize their holdings, especially as the exchange now boasts over 1 lakh shareholders.
Private equity players like Elevation Capital and TA Associates have already exited, citing low internal rate of returns (IRR) due to the prolonged listing delay.
Meanwhile, the unlisted share market has seen robust activity. Grey market prices for NSE shares have jumped from INR 900 in early 2024 to nearly INR 1,900 in May 2025, buoyed by FOMO among retail HNIs and growing anticipation of the IPO.
Financials & Valuation
As of FY25, NSE reported a 47% YoY jump in net profit to INR 12,187 crore, and a 17% rise in total income to INR 19,177 crore. With an EBITDA margin of 74% and 45% return on equity, the exchange stands as a financial powerhouse.
Its market dominance is undisputed:
- 93.6% share in equity cash segment
- 87.4% share in equity derivatives
- 11.3 crore+ registered investors
- Valuation of INR 4.7 lakh crore, overtaking even the Serum Institute of India.
Comparative Lens: BSE vs NSE
NSE’s rival, BSE, was listed in 2017 and trades around INR 2,448 per share post-bonus. Yet, it pales in comparison to NSE in terms of trading volume, profitability, and strategic relevance.
| Metric | NSE | BSE |
|---|---|---|
| FY24 Net Profit | 8,305.74 | 771.66 |
| FY24 Income | 16,433.61 | 1,617.90 |
| Equity Market Share | 93.6% | <7% |
| Derivatives Market Share | 87.4% | Negligible |
Conclusion
The NSE IPO saga is far more than a tale of one company seeking a public listing. It’s a test of India’s regulatory resolve, market maturity, and institutional accountability.
If SEBI and NSE can finalize the consent settlement and receive judicial approval, India’s most valuable unlisted company may finally transition to the public market. This would not only unlock value for over 1 lakh shareholders but also reaffirm global investor confidence in India’s financial governance.
The path forward may still involve a few more regulatory layers, but for the first time in years, the NSE IPO is no longer a question of “if” — it’s a question of “when”.