Free shares! NSE IPO DRHP reveals curious case of 5,000 shares landing in wrong demat account

As the National Stock Exchange’s IPO grabs headlines for its size and significance, two lesser-known disclosures buried in the draft red herring prospectus (DRHP) offer a glimpse into legal matters that prospective investors may find noteworthy.

One of them revolves around 5,000 NSE shares that the exchange alleges were erroneously credited to an individual’s demat account, triggering both civil and criminal proceedings.

According to the DRHP, NSE and Nuvama Wealth Finance filed a civil suit before the Delhi High Court against Kashmiri Lal Rana and NSDL in May 2025, alleging that 5,000 NSE shares were mistakenly transferred to Rana’s demat account on December 28, 2023, despite no corresponding purchase request or consideration being paid.

The exchange alleged that before the error was discovered, Rana had already sold 3,685 of those shares. NSE and Nuvama have sought a declaration that the transfer was void, recovery of Rs 1.43 crore representing the sale proceeds of the shares allegedly sold, and the return of the remaining shares.

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The dispute became more complicated after NSE’s 4:1 bonus issue in November 2024. The remaining 1,315 shares were entitled to 5,260 bonus shares. According to the DRHP, the Delhi High Court directed Rana not to sell or transfer the remaining shares, while NSDL was directed not to transfer the bonus shares during the pendency of the suit.

The exchange said Rana has denied the claims in his written statement, while the plaintiffs have filed a replication relying on what they describe as his admissions. The matter remains pending.

The Mauritius case

Separately, NSE disclosed that it had filed a criminal complaint against Rana. A first information report was registered in July 2025 at Mumbai’s Bandra-Kurla Complex Police Station alleging offences related to criminal breach of trust and cheating. According to the filing, NSE alleged that Rana knowingly retained the erroneously credited shares and sold 3,685 of them for Rs 1.327 crore. The matter remains pending.

Another legal matter disclosed in the DRHP relates to a petition filed before the Bombay High Court in May 2026 by an individual named Parinay Sharma against SEBI and NSE.

According to the filing, Sharma had earlier submitted a representation to SEBI alleging that certain investors in NSE had invested through Mauritius-based entities instead of direct investments and that beneficial ownership details of certain foreign shareholders had not been disclosed.

Read more: NSE IPO: BSE hosts double the listed companies but numbers tell a different story

The petition alleged that SEBI had not acted on the representation and sought, among other reliefs, a direction requiring NSE to disclose its promoter group and shareholders or ultimate beneficiaries along with KYC documents. The petitioner also sought a stay on NSE’s IPO process until the matter is finally decided. The DRHP states that the matter is currently pending before the court.

The NSE IPO is entirely an offer-for-sale (OFS) of up to 14.89 crore equity shares with a face value of Re 1 each, representing nearly 6% of NSE’s paid-up equity capital. The issue size has been fixed at 6% of the exchange’s paid-up capital.

NSE’s shares will be listed on BSE, mirroring the arrangement under which BSE‘s own shares are listed on NSE. With NSE’s valuation in the unlisted market hovering around Rs 5 lakh crore, market estimates suggest the IPO could be sized at roughly Rs 30,000 crore.

The filing marks the culmination of a listing process first initiated in December 2016, when NSE filed its first DRHP for a Rs 10,000-crore issue. The process was subsequently stalled due to the co-location controversy.

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