Mumbai: India’s market regulator, the Securities and Exchange Board of India (SEBI), is likely to take an important step towards the long-awaited IPO of the National Stock Exchange (NSE). SEBI Chairman Tuhin Kanta Pandey said the regulator may issue a no-objection certificate (NOC) for the IPO before the end of this month.
He said that once the NOC is given, it will be up to NSE to move forward with the listing process. This means NSE can then start the formal work needed to bring its shares to the stock market.
Why NSE’s IPO was delayed?
NSE’s IPO has been stuck for many years because of the dark fibre case. This case was related to how some traders got faster access to NSE’s trading system between 2010 and 2014.
It was alleged that certain high-frequency traders used special private communication lines to connect to NSE’s servers. This allowed them to place trades quicker than others, giving them an unfair advantage.
SEBI’s past action against NSE
In April 2019, SEBI ordered NSE to return Rs 62.58 crore that it said was earned unfairly. SEBI also banned some senior NSE officials from holding market-related jobs.
Later, in 2022, SEBI fined NSE Rs 7 crore. However, this fine was later removed by the Securities Appellate Tribunal. These legal and regulatory issues kept NSE’s IPO on hold for a long time.
Strong interest from retail investors
Even though the IPO is still pending, many small investors already own NSE shares through the unlisted or grey market. In July, NSE said that about 1.46 lakh retail investors hold its shares worth less than Rs 2 lakh.
This number has jumped sharply from 33,896 investors in the previous quarter. This shows strong interest from small investors, even as the share price has gone up.
Big investors reduce their holdings
On the other hand, the number of investors holding NSE shares worth more than Rs 2 lakh has fallen. Only 343 such investors remain, compared to 354 in the previous quarter.
This suggests that small investors are becoming more active in NSE shares as the IPO moves closer.
