The much-anticipated NSE IPO has remained stalled for nearly a decade, caught in a complex web of regulatory caution, unresolved litigation, investor impatience, and structural scrutiny. What was once expected to be a landmark corporate event has instead become a prolonged saga in India’s capital markets.
Over the years, several international and domestic investors have exited their positions due to the extended delays. The newly appointed SEBI chairperson—the fourth to oversee the matter since 2016—has recently clarified the reasons behind the hold-up. His predecessors include Madhabi Puri Buch (March 2022 – February 2025), Ajay Tyagi (March 2017 – February 2022), and U.K. Sinha (February 2011 – March 2017).
Given NSE’s scale and systemic importance, SEBI’s cautious approach is rooted in a need to thoroughly safeguard investor interests before granting approval to NSE IPO.
From SEBI’s Side: Between Vigilance and Delay
SEBI Chairman Tuhin Kanta Pandey, speaking at the CII Corporate Governance Summit, offered perhaps the clearest articulation of SEBI’s position yet.
“We are not opposed to NSE 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.”
In a 28 February 2025 letter to NSE, SEBI outlined four critical deficiencies:
1. Technology & Operational Resilience
SEBI cited repeated trading outages and questioned the robustness of NSE’s tech infrastructure. While the exchange claims to have fortified systems post-2021’s trading halt, the regulator demands additional assurance mechanisms.
2. Governance & Board Accountability
Concerns remain about independent director strength, executive oversight, and boardroom culture. SEBI warned against “check-the-box compliance,” instead pushing for “ethical governance” where boards “ask difficult questions.”
3. Pending Litigation
While NSE settled with SEBI in October 2024 by paying INR 643 crore, cases tied to the co-location scandal still pending in the Supreme Court. SEBI insists that no IPO can proceed until full legal closure is achieved.
4. Clearing House Conflicts
The regulator flagged the ownership overlap between NSE and its subsidiary NSE Clearing Corporation Ltd. (NCL). To avoid conflict of interest, SEBI has asked for structural separation of clearing and trading operations — a global best practice that NSE is yet to fully implement.
NSE IPO Whole Story – IPO Dream to Legal Battlefield
The NSE IPO DRHP was first filed in 2016, aiming to raise INR 10,000 crore through an offer-for-sale. But its plans were derailed by the co-location (Colo) scandal, where certain brokers were allegedly given privileged access to exchange systems—allowing faster trade execution and sparking regulatory outrage.
Following investigations, SEBI slapped over INR 1,000 crore in penalties, barred NSE from accessing capital markets for six months, and demanded leadership changes. By 2019, NSE had withdrawn its IPO application altogether.
The legal proceedings surrounding the National Stock Exchange’s (NSE) delayed IPO began on 3 May 2024, when the People Activism Forum filed a writ petition in the Delhi High Court urging the SEBI to grant approval for the listing. SEBI responded by advising NSE to reapply for a no-objection certificate (NOC), which the exchange did on 27 August 2024. The matter came up for hearing on 3 December 2024, where the court directed SEBI to submit a response within four weeks.
A subsequent hearing was scheduled for 6 March 2025, but it was adjourned to 26 May 2025, upon request from NSE’s legal counsel. The 26 May hearing is still pending, but investors and stakeholders remain hopeful that it will provide much-needed clarity on the future of the IPO.
State-Owned Entities Left in the Cold
Long-term institutional investors, especially state-owned giants, have grown increasingly vocal about the lack of liquidity options. Among the top stakeholders:
- LIC – 10.7%
- State Bank of India – 3.23%
- SBI Caps – 4.33%
- Stock Holding Corporation – 4.4%
- Public Sector Insurers – 6.8%
While some may not wish to exit entirely, all are seeking partial monetization after over a decade of investment.
Private Equity and the Exit Dilemma
Private investors have responded with their feet. Elevation Capital exited fully in FY24, selling 68 lakh shares at unlisted market valuations of INR 2,300–INR 3,200 crore. Acacia Banyan Partners, TA Asia Pacific, Ontario Inc, and Crown Capital followed suit — citing limited fund life cycles and lack of IPO visibility.
“We’ve made a return, but the IRR is underwhelming. We waited too long,” said a partner at one such fund.
The Unlisted Market: A Parallel Reality
In a curious twist, NSE unlisted shares in the grey market surged 75% in 2024, from INR 900 to INR 1,800 — driven by retail HNI appetite and FOMO (fear of missing out). Today, over 10,000 resident individual investors collectively hold 13.8% of NSE shares, up from 10.7% last year.
This represents not only a democratization of ownership but also a two-speed valuation narrative: the formal market waits for regulatory greenlight, while informal markets run on anticipation.
Below is the list of top 10 shareholders in NSE as of 31 March 2024:
| S. N. | Name of the Shareholder | No. of Shares | % to Total Paid-up Equity Capital |
| 1 | Life Insurance Corporation of India | 5,30,55,000 | 10.72% |
| 2 | Aranda Investments (Mauritius) Pte | 2,47,50,000 | 5.00% |
| 3 | Stock Holding Corporation of India | 2,20,00,000 | 4.44% |
| 4 | SBI Capital Markets | 2,14,50,000 | 4.33% |
| 5 | Veracity Investments | 1,94,59,000 | 3.93% |
| 6 | State Bank of India | 1,59,69,410 | 3.23% |
| 7 | Crown Capital | 1,43,71,093 | 2.90% |
| 8 | PI Opportunities Fund I | 1,32,60,000 | 2.68% |
| 9 | TIMF Holdings | 1,08,81,577 | 2.20% |
| 10 | Canada Pension Plan Investment Board | 98,95,050 | 2.00% |
NSE vs BSE: More Than Just Indexes
India’s two primary stock exchanges have grown into structurally and strategically different institutions. While the BSE (est. 1875) enjoys legacy status and hosts the SENSEX, the NSE (est. 1992) has become the center of liquidity, derivatives trading, and passive fund flows.
| NSE | BSE | |
| Year of Establishment | 1992 | 1875 |
| Number of companies listed | 2,498 | 5,862 |
| Market Capitalization*** | INR 4,47,975 crore | INR 80,292 crore |
| Benchmark Index | Nifty 50 | BSE Sensex |
| Global Ranking** (market capitalization December 2024) | 7th | 6th |
| Electronic Trading | 1992 | 1995 |
| Total Income* | INR 16,433.61 crore | INR 1,617.90 crore |
| Net Profit* | INR 8,305.74 crore | INR 771.66 crore |
| SME platform | NSE Emerge | BSE SME |
** WFE Statistics
*** As of 19 April 2025
Valuation Discrepancies: Why NSE Shares Are Available at ‘Fair Value’
Despite its dominance, shares listed on the NSE typically trade at slightly lower valuations compared to BSE — a paradox driven by the following factors:
- ● Superior Liquidity: NSE’s tighter bid-ask spreads, institutional order routing, and HFT compatibility lead to more efficient price discovery — and ironically, slightly lower valuations.
- ● Index Tracking & Passive Flows: ETFs and FII flows concentrate on NSE stocks, ensuring valuation aligns with underlying fundamentals rather than speculative sentiment.
- ● Retail and Behavioral Biases on BSE: Some older or thinly traded stocks on BSE are prone to price anchoring and irrational premiums, creating a valuation mirage for uninformed investors.
Strategic Fallout: Every NSE Listing Undermines BSE
Every time a company lists on the NSE, it sets off a chain reaction:
- Liquidity drains from BSE, as NSE captures 80–90% of volumes.
- NSE becomes the price-setter, turning BSE into a passive mirror.
- Institutional capital follows, ignoring BSE feeds.
- Revenue, prestige, and perception shift toward NSE.
The result? BSE increasingly risks becoming a niche platform for SMEs and bonds, while NSE continues redrawing the competitive battlefield.
Conclusion: NSE IPO Is More Than Just a Listing
The NSE IPO saga is no longer about share sales or institutional exits. It is now a stress test of India’s regulatory conscience, market maturity, and investor patience. If we consider all the facts, NSE IPO could delay by one or two years.
On one side, SEBI’s caution is well-placed — a lax approach could undermine decades of market-building. But investors’ concerns are also valid — holding capital hostage indefinitely creates erosion, not just of value, but of trust.
As India eyes deeper financial inclusion and global relevance, the NSE IPO could become the litmus test for how far we’ve come — and how far we still need to go.
Until then, the nation’s most valuable unlisted company remains… unlisted. For more details related to IPO GMP, SEBI IPO Approval, and Live Subscription stay tuned to IPO Central.