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India’s capital markets are closer to a landmark listing after the Securities and Exchange Board of India granted in-principle approval to the National Stock Exchange to settle the long-pending unfair market access case. This regulatory development removes a major roadblock that has delayed the NSE IPO for almost 10 years.
SEBI Chairman Tuhin Kanta Pandey confirmed that the regulator has agreed in principle to the exchange’s settlement plea and is in advanced stages of issuing a No Objection Certificate (NOC), potentially by January 2026. While this does not amount to a final clearance, it is still a crucial step forward.
The Unfair Market Access Issue Explained
The case relates to allegations that some trading members received preferential access to the NSE’s co-location servers. This access allegedly allowed select brokers to receive market data and execute trades faster than others. Following a whistle-blower complaint in 2015, SEBI launched investigations that resulted in penalties. The prolonged regulatory and legal proceedings that ensued became the primary reason behind repeated delays in the NSE’s IPO plans, originally announced in 2016.
Also Read: NSE Offers 1000 Crore To Settle SEBI Case, Bring Back IPO
What In-Principle Approval Means For NSE?
In-principle approval indicates that SEBI broadly agrees to the terms proposed by the NSE to resolve the dispute under its settlement framework. The settlement involves a payment of around Rs. 1,388 cr. approximately.
This approval still needs to be formalised through SEBI’s internal committees and procedures before a final settlement order is issued. However, market participants see this as a strong signal that the regulator is prepared to close the matter if all the conditions are met.
“That’s good news, and we have not yet got the intimation,” NSE Chief Ashish Kumar Chauhan stated when asked about SEBI’s in-principle clearance. He also added that the exchange will be able file a DRHP only after formally getting an NOC from SEBI.
Government Clears Reduced Public Float Norm
Alongside regulatory progress, policy support has also strengthened the IPO outlook. The Government of India has approved a provision allowing large companies to list with a minimum public shareholding of 2.5 percent instead of the earlier 5 percent requirement.
This relaxation applies to companies expected to have a post-listing valuation of over Rs.5 lakh crore. For the NSE, this change makes IPO structuring easier, as existing shareholders will not need to dilute a large portion of their holdings at the time of listing. A formal notification of this rule change is expected soon.
Investor Reaction and Unlisted Share Prices
Regulatory clarity has already impacted investor sentiment. NSE unlisted shares have reportedly risen by 10 to 15% in recent days, driven by expectations that the IPO might finally materialise. Shares are currently trading at around Rs.2,095 in the unlisted market, although prices vary based on deal size and liquidity.
The exchange has a large shareholder base of about 1.78 lakh investors. Managing exits and allocations for this diverse group will be an important part of the IPO process, with institutional shareholders likely to be prioritised.
Challenges Still Remain
Despite the progress, the unfair market access matter is still pending before the Supreme Court. SEBI has also indicated that certain disclosure-related issues will need to be addressed carefully in the IPO documents.
Final settlement approval and the issuance of the No Objection Certificate remain critical milestones before the IPO can proceed.
Is the NSE IPO Finally Within Reach?
SEBI’s in-principle approval marks the most decisive step yet toward the NSE’s long-awaited public listing. Supported by favourable policy changes and renewed investor confidence, the exchange is now closer than ever to entering the public markets. If completed, the IPO would be a defining moment for India’s capital market infrastructure and governance standards.
