On FEB 16th, the Delhi High Court dismissed a petition that questioned the Securities and Exchange Board of India (SEBI)’s approval for the National Stock Exchange of India (NSE) IPO.
While the ruling removed an immediate legal hurdle, it once again brought attention to why the NSE IPO delay narrative continues to surface. Now, let us discuss in detail.
Why Was the Petition Filed?
The petition was filed by a former judicial officer who challenged SEBI’s approval granted on 30 January for NSE’s IPO. The core of the challenge was not the IPO valuation or timing, but the exchange’s handling of Corporate Action Adjustments (CAA) in the derivatives segment.
When companies announce things like dividends, bonus issues or stock splits, CAA is meant to make sure that futures and options traders don't lose money.
The petitioner said that NSE didn't follow this framework because it only changed prices and took dividend-equivalent amounts directly from derivatives traders' accounts, instead of changing both price and quantity.
According to the plea, dividends legally accrue only to shareholders under the Securities Contracts (Regulation) Act and not to derivatives traders. The petitioner also claimed that complaints raised on this issue were closed without a proper hearing and that requests under the Right to Information Act seeking details of the debited amounts were rejected, creating what was described as an “information vacuum".
What Did the High Court Observe?
The honourable Delhi High Court did not look at these claims on their own merits. The bench dropped the petition simply because it was not in their jurisdiction. Justice Jasmeet Singh refused the plea by K.C. Agarwal, who is a former judicial officer. And observed that SEBI, NSE, and the no-objection certificate (NOC) for the IPO are all located in Mumbai.
The Delhi High Court said it is unable to hear the petition because the regulatory approval was given there. Because of this, the plea was turned down immediately.
What does this mean for the NSE IPO?
The dismissal gets rid of a procedural problem, but it doesn't mean that the issues raised are legally valid.
For now, SEBI's approval still stands, so NSE can keep getting ready for its IPO.
Still, the episode shows why the story of the NSE IPO delay keeps going. Years of regulatory scrutiny and legal complexity are still closely linked to its path to listing.
Why is NSE not getting listed?
Issues with governance and regulation that surfaced almost ten years ago are the reason for the NSE IPO delay.
In 2015, the NSE submitted its initial IPO draft documents. However, after the Securities and Exchange Board of India (SEBI) discovered irregularities in the exchange's co-location services, the process came to a halt. Serious questions concerning market fairness, transparency, and governance were raised when investigations showed that some trading firms had been given preferential access to the NSE's servers.
After conducting thorough investigations, SEBI discovered violations of the rules governing clearing corporations and stock exchanges.
In 2019, in addition to interest and other fines, the regulator enforced penalties and ordered the repayment of illegal gains. The timeline was further extended by the matter's progression through several legal meetings.
NSE's Took Action To Address
NSE has taken action to address these legacy problems over the years. The exchange resolved one of its biggest pending regulatory liabilities in October 2024 by paying Rs. 643 crore as part of a settlement.
After years of uncertainty regarding NSE IPO issues, it got an NOC from SEBI in January 2026, allowing NSE to resume its IPO process after several reviews had been completed and regulatory settlements had already taken place.
Also Read: NSE IPO Mega Update: SEBI Gives NOC Clears Regulatory Hurdle
