NSE IPO DRHP filing moves closer! SEBI clears Rs 1,800 crore settlement path

The path for the National Stock Exchange (NSE) to file its Draft Red Herring Prospectus (DRHP) for an initial public offering (IPO) has become clearer after a SEBI panel reportedly finalised a settlement fee of around Rs 1,800 crore in connection with the co-location and dark fibre cases.

According to reports, the Securities and Exchange Board of India’s (SEBI) High Powered Advisory Committee (HPAC) has fixed the settlement amount, and the regulator is expected to soon issue a final order in the matter. The development is being seen as a key step towards resolving long-pending regulatory issues linked to the exchange.

Regulatory approval process and market impact

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Market sources said that the settlement, once formally approved, could remove a major hurdle in the NSE’s listing process. The exchange has been preparing for its IPO and may move ahead with filing its DRHP after completion of the settlement process and receipt of final regulatory clearance.

Earlier, NSE had made a provision of Rs 1,388 crore in its accounts for the settlement related to the case. The final amount finalised by the SEBI committee is higher than the provision made by the exchange, according to reports.

Long-pending cases near closure

The co-location and dark fibre cases have been under regulatory scrutiny for several years. The settlement is expected to bring closure to one of the key outstanding issues involving the country’s largest stock exchange.

Market participants said that after SEBI issues its final order, NSE is likely to proceed with the IPO-related process, including DRHP filing and further regulatory discussions.

NSE management on listing rules and IPO structure

In earlier remarks, NSE Managing Director and Chief Executive Officer Ashish Chauhan said the exchange cannot list on its own platform as per Indian regulations. He said the exchange will have to list on another recognised platform.

“It’s a regulation of India, and we have to abide by that,” Chauhan said, adding that regulatory requirements do not allow self-listing for stock exchanges in India.

He also said the IPO will take time to prepare and that the exchange has already received a no-objection certificate from SEBI after a long wait. Following this, preparatory work for the DRHP has been underway.

Chauhan had also indicated that the IPO will not involve fresh fundraising for the company. Instead, it will be structured as an Offer for Sale (OFS), where existing shareholders will sell a part of their holdings.

OFS structure, governance view and next steps

Under the OFS structure, proceeds from the share sale will go to selling shareholders and not to NSE itself. The exchange has nearly 1.95 lakh shareholders, who collectively own 100 per cent of the company.

According to him, shareholders will be asked whether they wish to participate in the share sale process before the IPO is filed. After regulatory approvals, the shares will be offered to the public and will begin trading on the chosen exchange.

Chauhan also said that listing is expected to improve transparency and governance standards. He said public listing brings greater market scrutiny and accountability, which helps improve decision-making processes in large institutions.

He added that any public utility institution should ideally be listed, as it increases disclosure and investor participation. He cited examples of improved corporate governance in listed public sector entities.

The NSE IPO has been under discussion for several years but has faced delays due to regulatory issues and pending approvals. With the settlement process moving forward, market participants are now watching closely for further steps, including DRHP filing and SEBI clearance.

However, NSE has not issued any official statement on the latest settlement development when approached. The exchange has maintained that it will follow all regulatory processes before moving ahead with its listing plans.

The final settlement order from SEBI and subsequent IPO filings are expected to provide more clarity on the timeline for one of the most closely watched listings in the Indian capital market.