The proposed payment marks what could be the largest settlement in SEBI’s history and signals an effort by NSE to put to rest regulatory hurdles that have blocked its listing ambitions for nearly a decade. Founded in the early 1990s, NSE has grown into India’s largest stock exchange and is currently the world’s most active derivatives marketplace by volume.
The dispute dates back to 2019 when SEBI penalized NSE 11 billion rupees for failing to ensure equal access to its co-location trading infrastructure, which allegedly gave certain brokers an unfair speed advantage. While NSE contested the decision in court—winning partial relief—the matter remained entangled in litigation, delaying its IPO plans first set in motion as far back as 2016.
According to three individuals with direct knowledge of the ongoing talks—who spoke on condition of anonymity due to the sensitivity of the discussions—the exchange and SEBI are currently negotiating an out-of-court settlement. The terms, if finalized, would not only resolve the dispute but also pave the way for SEBI to issue a “no objection” certificate required for the IPO.
One source noted that the certificate could be issued within the next three months, potentially setting up a public listing as early as May next year. “If all goes as per expected timelines, NSE’s IPO could hit the markets before May next year,” the source said.
Neither NSE nor SEBI has issued official comments regarding the reported settlement or IPO timeline.
Behind the push for a listing lies pressure from several institutional investors seeking an exit. These include the Life Insurance Corporation of India (LIC), which holds a 10.72% stake; the State Bank of India, with 7.76%; Morgan Stanley at 1.58%; and the Canada Pension Plan Investment Board, which owns 1.60%. By contrast, its domestic rival, BSE Ltd, successfully went public in 2017.
While the settlement would remove a major obstacle, final clearance still hinges on SEBI’s ongoing inspection of NSE’s governance and technology practices. In February, SEBI raised concerns in a formal communication to NSE over its management appointment processes, lack of a sitting chairperson, and certain technology-related shortcomings.
Even if SEBI accepts the settlement proposal, the agreement must still be ratified by India’s Supreme Court, according to two of the sources.
NSE's potential listing would mark a significant moment in Indian capital markets, not only due to the scale and valuation of the exchange but also for the precedent it sets in resolving high-profile regulatory disputes outside traditional courtroom channels.