SEBI Approves NSE IPO, Paving Way for 2026 Listing

Introduction: A Landmark Approval

The Securities and Exchange Board of India (SEBI) has issued a No-Objection Certificate (NOC) for the highly anticipated Initial Public Offering (IPO) of the National Stock Exchange (NSE). This approval marks a pivotal moment for India's largest stock exchange, clearing a significant regulatory hurdle that has delayed its public listing for nearly a decade. The decision signals growing confidence in the exchange's reformed governance and compliance frameworks, setting the stage for one of the most significant market debuts in the country's history.

The Long Road to a Public Listing

The journey for the NSE IPO began in December 2016 when the exchange first filed its Draft Red Herring Prospectus (DRHP). However, the process was soon derailed by serious regulatory concerns. The primary obstacle was the co-location controversy, which involved allegations that certain trading members were given preferential and unfair access to the exchange's algorithmic trading platform. These allegations led to extensive investigations by SEBI, multiple penalties, and a prolonged period of uncertainty that effectively put the IPO plans on hold. The case, which is still pending before the Supreme Court, cast a long shadow over the exchange's governance and operational integrity, making regulatory clearance for a public issue difficult to obtain.

Resolving Past Hurdles and Rebuilding Trust

In a concerted effort to move past these legacy issues, the NSE has undertaken comprehensive corrective measures over the past few years. A critical step was the settlement of its Trading Access Point (TAP) architecture and network connectivity case in October 2024, for which the exchange paid a penalty of ₹643 crore. Beyond financial settlements, the NSE has implemented significant structural reforms. According to SEBI Chairman Tuhin Kanta Pandey, these changes include a complete overhaul of senior management, a restructuring of its board, and the strengthening of its internal compliance frameworks. These actions were instrumental in rebuilding regulatory trust and demonstrating the exchange's commitment to transparent and fair market practices.

Official Confirmation and the Path Forward

The final clearance came into focus following statements from SEBI Chairman Tuhin Kanta Pandey in January 2026. He confirmed that the regulator was at a "very advanced stage" of issuing the NOC and indicated it could be granted within the month. With the NOC now secured, the NSE can officially begin the next phase of its IPO process. According to NSE CEO Ashish Chauhan, the exchange anticipates a timeline of approximately four months to prepare and file a new DRHP. This will be followed by another four-month period for SEBI's review and to address any subsequent queries before the IPO can be launched.

A Snapshot of the NSE IPO Journey

To understand the context of this approval, it is helpful to look at the key milestones that have defined the NSE's path to its public offering.

Market Position and Financial Overview

The NSE holds a dominant position in the Indian capital markets. It is the country's largest stock exchange and is recognized globally as the world's largest derivatives exchange by trading volumes. This market leadership makes its IPO a highly attractive proposition for investors. However, its financial performance remains subject to market conditions and regulatory dynamics. In the September 2025 quarter, the exchange reported a 33% year-on-year drop in profit after tax, while its consolidated revenue from operations declined by 18%. These figures underscore the operational sensitivities despite its strong market standing.

Impact on Investors and the Broader Market

Anticipation surrounding the NSE IPO has already had a tangible impact. In the unlisted market, the price of NSE shares has reportedly increased by 10-15% over the past two months as speculation about the approval grew. The exchange has an unusually large shareholder base for an unlisted entity, with approximately 177,807 investors. The listing is expected to unlock value for these existing shareholders and attract significant interest from institutional and retail investors alike. The IPO is viewed as a major development that will enhance transparency and bring the exchange itself under the purview of market discipline that it enforces on other listed companies.

Conclusion

The issuance of the No-Objection Certificate by SEBI is more than a procedural step; it is a vote of confidence in the National Stock Exchange's reformed operational and governance structure. After a decade of regulatory challenges and internal reforms, the path is finally clear for the exchange to proceed with its public listing. As the NSE engages investment bankers and prepares its prospectus, the Indian capital market is poised for a landmark event that will be closely watched by investors both domestically and globally.