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What is the story about?
SEBI chairman Tuhin Kanta Pandey on Thursday said the regulator has "in-principle" agreed with the settlement plea filed by the National Stock Exchange with regard to the unfair market access case, a move that may clear the decks for an initial public offering (IPO) by the country's largest bourse.
Pandey also said that the government has approved a proposal allowing large companies to sell 2.5% stake in an IPO.
He, however, steered clear of commenting on the high interest in NSE shares in the unlisted markets, noting that the matter falls under the Ministry of Corporate Affairs, after it was stated that a no-objection certificate (NOC) for the IPO will be issued soon.
"The settlement application (from NSE) is in process with different committees (of SEBI), but in principle, we agree on the settlement," he told reporters on the sidelines of an AIBI event here.
It can be noted that NSE, which has been struggling to go public since 2016, has been facing delays in its plans due to the colocation case, in which select brokers were alleged to have been granted preferred access to the exchange. After a long-drawn legal battle, it offered to pay ₹1,388 crore in 2025 to settle the charges and proceed ahead with the IPO.
The settlement is seen as a key in the run-up to the eventual NOC from the regulator for the IPO. Pandey had earlier said that the NOC will come in a month's time.
NSE's IPO is expected to be one of the largest to hit the Indian markets.
SEBI had last year lowered the minimum public offer threshold for an entity to 2.5% of the holding, from 5%, for companies valued at over ₹5 lakh crore, which is deemed to help players like NSE and the largest telco, Reliance Jio.
Speaking with PTI Videos after casting his vote in the civic polls, NSE's managing director and chief executive, Ashish Kumar Chauhan, said the in-principle nod to the settlement plea is "good news," but added that he has not received any official intimation on it yet.
"… Once we receive that, we will of course have to follow whatever is there in the intimation. Once we get the NOC, we will start preparing for (filing) the draft red herring prospectus (DRHP)," he said.
It will take up to four months to file the DRHP after the SEBI NOC for the IPO, which will have to be cleared by the regulator, Chauhan said, adding that the issue will take over seven months after the NOC to hit the markets.
"I still think after NOC, 7-8 months (for the IPO). If we can expedite that, we will try to do that," he added.
Meanwhile, in his address to investment bankers, Pandey rued that SEBI continues to observe "recurring disclosure gaps" that reduce transparency and investor understanding.
SEBI inspections show that due diligence is not always independent and also relies on issuer undertakings at times, Pandey said, asking for projections on working capital and capital expenditure to be independently verified.
He reminded the investment banking community that their due diligence and professional judgement enable investors to make informed decisions.
The investment bankers are the "first line of disclosure integrity", ensuring the offer document is clear, complete, and verifiable on business, risks, governance, and use of funds, he said.
These gaps lead to regulatory queries and lengthen companies' fundraising timelines, he said.
"Disclosures on Capital Structure must clearly explain past capital raisings, preferential allotments, and changes in control – especially close to the IPO. We also expect greater Business Model clarity, with transparent revenue and cost drivers," he said.
There is also a need for the management discussion and analysis to move beyond narration and explain the internal and external drivers of performance, Pandey said.
Pandey also said that the government has approved a proposal allowing large companies to sell 2.5% stake in an IPO.
He, however, steered clear of commenting on the high interest in NSE shares in the unlisted markets, noting that the matter falls under the Ministry of Corporate Affairs, after it was stated that a no-objection certificate (NOC) for the IPO will be issued soon.
"The settlement application (from NSE) is in process with different committees (of SEBI), but in principle, we agree on the settlement," he told reporters on the sidelines of an AIBI event here.
It can be noted that NSE, which has been struggling to go public since 2016, has been facing delays in its plans due to the colocation case, in which select brokers were alleged to have been granted preferred access to the exchange. After a long-drawn legal battle, it offered to pay ₹1,388 crore in 2025 to settle the charges and proceed ahead with the IPO.
The settlement is seen as a key in the run-up to the eventual NOC from the regulator for the IPO. Pandey had earlier said that the NOC will come in a month's time.
NSE's IPO is expected to be one of the largest to hit the Indian markets.
SEBI had last year lowered the minimum public offer threshold for an entity to 2.5% of the holding, from 5%, for companies valued at over ₹5 lakh crore, which is deemed to help players like NSE and the largest telco, Reliance Jio.
Speaking with PTI Videos after casting his vote in the civic polls, NSE's managing director and chief executive, Ashish Kumar Chauhan, said the in-principle nod to the settlement plea is "good news," but added that he has not received any official intimation on it yet.
"… Once we receive that, we will of course have to follow whatever is there in the intimation. Once we get the NOC, we will start preparing for (filing) the draft red herring prospectus (DRHP)," he said.
It will take up to four months to file the DRHP after the SEBI NOC for the IPO, which will have to be cleared by the regulator, Chauhan said, adding that the issue will take over seven months after the NOC to hit the markets.
"I still think after NOC, 7-8 months (for the IPO). If we can expedite that, we will try to do that," he added.
Meanwhile, in his address to investment bankers, Pandey rued that SEBI continues to observe "recurring disclosure gaps" that reduce transparency and investor understanding.
SEBI inspections show that due diligence is not always independent and also relies on issuer undertakings at times, Pandey said, asking for projections on working capital and capital expenditure to be independently verified.
He reminded the investment banking community that their due diligence and professional judgement enable investors to make informed decisions.
The investment bankers are the "first line of disclosure integrity", ensuring the offer document is clear, complete, and verifiable on business, risks, governance, and use of funds, he said.
These gaps lead to regulatory queries and lengthen companies' fundraising timelines, he said.
"Disclosures on Capital Structure must clearly explain past capital raisings, preferential allotments, and changes in control – especially close to the IPO. We also expect greater Business Model clarity, with transparent revenue and cost drivers," he said.
There is also a need for the management discussion and analysis to move beyond narration and explain the internal and external drivers of performance, Pandey said.
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