NSE IPO Gets Major Boost As Supreme Court Dismisses SEBI Appeals In Co-Location Case
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The Supreme Court’s decision removes a long-standing legal overhang linked to NSE’s co-location and dark fibre cases. The exchange had already taken steps towards its proposed IPO, including filing its DRHP and securing in-principle approval from SEBI to settle certain past regulatory matters.
The proposed National Stock Exchange (NSE) IPO received a major boost on Thursday, September 3, after the Supreme Court dismissed appeals filed by market regulator Securities and Exchange Board of India (SEBI) against the exchange in cases linked to co-location and dark fibre connectivity.
CNBC-TV18, citing news wire agency Informist, reported that the Supreme Court's decision removes a key regulatory hurdle that has been hanging over NSE's planned listing for several years.
The co-location matter relates to allegations that certain brokers received preferential access to NSE's trading servers. The exchange has been under regulatory scrutiny over the issue since 2015, resulting in investigations and prolonged legal proceedings.
NSE IPO: What Is The Co-Location Case?
The co-location case centres on allegations that some brokers were able to access NSE's trading infrastructure faster than others.
SEBI had also examined the use of dark-fibre connections, which allowed certain brokers to establish faster links through the exchange's fibre network.
The regulatory cases have been among the key issues delaying NSE's listing plans. The Supreme Court's latest decision could therefore clear an important legal overhang as the exchange moves towards its proposed IPO.
NSE and SEBI had not immediately responded to requests for comment, according to the report.
NSE IPO Approval: What Happens Next?
NSE had earlier received regulatory approval to move ahead with the process and filed its draft red herring prospectus (DRHP) for the IPO in June.
The proposed issue is an offer for sale, with existing shareholders looking to sell up to around 14.89 crore shares, equivalent to about 6% of NSE's paid-up equity capital. The exchange itself will not receive proceeds from the offer.
The IPO process had been closely watched because of NSE's pending regulatory matters. In July, NSE said SEBI had granted in-principle approval for settlement of certain past regulatory issues, subject to a payment of ₹1,491 crore.
The proposed listing is expected to give existing shareholders an opportunity to monetise their holdings while also providing public-market investors access to India's largest stock exchange.
NSE's IPO could value the exchange at a significant premium to its unlisted market value. Reports have previously indicated that the exchange could seek a valuation of around ₹5.26 lakh crore.
The Supreme Court's latest ruling is therefore an important development for the IPO process, although other regulatory and procedural steps will still need to be completed before the issue can open for subscription.
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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.
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