NSE IPO: Exchange May Allow Trading In Its Shares On Its Own Platform After BSE Listing
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NSE may allow its shares to trade on its own platform after a BSE listing, subject to SEBI approval, potentially opening the way for Nifty index inclusion.
National Stock Exchange of India Ltd may allow its shares to trade on its own platform after the stock is listed on rival BSE Ltd, according to inputs from Economic Times. The move, if approved, could give NSE shares access to liquidity on both exchanges and eventually make them eligible for inclusion in NSE's benchmark indices.
The proposal was discussed with global investors during recent roadshows held ahead of NSE's proposed initial public offering, according to people familiar with the matter. The discussions are private. Under the proposal, NSE shares could be formally listed on BSE while also being allowed to trade on NSE under the exchange's "permitted to trade" category.
Current regulations do not provide for a stock exchange to trade its own shares. NSE is classified as a market infrastructure institution and would therefore need approval from the Securities and Exchange Board of India (SEBI) before its shares could trade on its own platform. The discussions are still underway and any such arrangement would be subject to regulatory approval. NSE did not respond to requests for comment.
How The 'Permitted To Trade' Framework Works
The permitted-to-trade framework allows securities to trade on NSE without being formally listed on the exchange. Companies using the framework continue to remain subject to their applicable compliance and disclosure requirements.
NSE changed its index eligibility rules in 2019 to allow securities traded under the permitted-to-trade category to qualify for inclusion in the Nifty indices. Earlier, only securities formally listed and traded on NSE were eligible.
Around 250 companies that are not formally listed on NSE currently trade on the exchange under this framework. Elantas Beck India, Goodyear India and Novartis India are among the companies using the route.
If NSE receives regulatory clearance for a similar arrangement, its shares could therefore trade on both BSE and NSE even though BSE would remain the formal listing venue. The proposed structure could also open the way for NSE shares to qualify for inclusion in the exchange's benchmark indices, subject to the applicable index rules.
The development comes as NSE moves closer to its proposed public issue. The exchange is expecting SEBI approval for its draft prospectus by the end of August and is targeting an IPO launch in the second half of September.
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Rochelle Britto has spent 8+ years decoding India's markets, businesses, and consumer economy, reporting for ET Prime and Times Internet along the way, covering the stories behind the numbers.
A Mumbai native and perpetual planner of the next holiday, she stays far, far away from the eternal question, “Where are we going next?” When she's not chasing headlines, she's chasing new cultures, open roads, and a bit of quiet in nature.
