NSE plans to refile for NOC to proceed with Rs 30,000-cr IPO

The National Stock Exchange‘s board will once again seek the capital markets regulator’s no-objection certificate (NOC) for launching its much-awaited initial public offering, said sources with knowledge of the development. The bourse’s IPO has been in cold storage for a while as it deals with ongoing regulatory matters, including the co-location case.

The plan to refile for NOC with the Securities and Exchange Board of India was discussed in the exchange’s annual general meeting on Tuesday, said shareholders.

It will be able to file the draft IPO documents with the regulator only after it secures the NOC.

NSE did not respond to queries.

The exchange initially filed its draft red herring prospectus (DRHP) in 2016, but Sebi returned it in 2019, instructing the exchange to refile after resolving the colocation investigation. The matter is now pending before the Supreme Court, with the next hearing scheduled for September 3.Earlier this month, Sebi informed the Delhi High Court, in response to a writ petition regarding the delay of the NSE IPO, that the exchange has not yet submitted a fresh request for an NOC. In June 2022, NSE sought Sebi’s approval for the listing, but the request was rejected due to lapses in governance, technology, surveillance, trading, and other areas.The NSE’s IPO is expected to be India’s largest by size. Shares of NSE are currently trading at ₹6,000 each in the unlisted market, nearly double the price from a year ago. At this price, the exchange’s market capitalisation would be at ₹3 lakh crore.The size of the IPO is expected to be ₹30,000 crore if the exchange decides to sell 10% of its equity in the issue. Life Insurance Corporation’s ₹21,008 crore issue in May 2022 is the largest IPO in India, followed by Paytm’s ₹18,300 crore in November 2021.

Some of the major shareholders in NSE include LIC (7.2%), Stock Holding Corporation (4.44%), SBI Capital Markets (4.33%), State Bank of India (3.23%), and Temasek Holdings (5%).

For the fiscal year ended March 31, 2024, NSE posted a net profit of ₹8,306 crore, up 13% from the previous year. Revenue grew to ₹14,780 crore, up 25% from FY23.

Brokerage IIFL Securities said on Tuesday NSE received Sebi approval to increase authorized share capital to issue bonus shares. In May, the exchange announced a four-for-one bonus issue along with a ₹90 per share dividend. The firm said Sebi’s proposed norms to curtail heightened F&O could impact the exchange’s turnover.

“If implemented, these measures could reduce NSE’s trading volumes by nearly one-third, leading to a projected 20-25% cut in FY26 estimated EPS,” said IIFL Securities.