NSE IPO on Track for 2026 as SEBI Grants In-Principle Approval

Introduction

India's largest stock exchange, the National Stock Exchange (NSE), is finally moving towards a public listing after nearly a decade of regulatory delays. The Securities and Exchange Board of India (SEBI) has granted an in-principle approval, or No-Objection Certificate (NOC), for the exchange's long-awaited Initial Public Offering (IPO). This development marks a significant breakthrough, clearing a major hurdle related to past governance issues and setting the stage for one of the most anticipated listings in Indian capital market history.

SEBI's Green Light: A Major Hurdle Cleared

SEBI Chairman Tuhin Kanta Pandey confirmed that the regulator is in the advanced stages of issuing the formal NOC, potentially by the end of January 2026. He stated, "In principle, we agree for settlement," referring to the resolution of the long-pending unfair market access case that had stalled the IPO. This in-principle agreement is a crucial signal that the regulatory roadblocks, primarily stemming from the co-location controversy, have been substantially addressed. The NOC is a mandatory clearance from SEBI for any market infrastructure institution, like a stock exchange, before it can file for an IPO.

NSE's Path Forward: The Road to Listing

Following the positive signals from the regulator, NSE's leadership has outlined the next steps. Ashish Chauhan, the Managing Director and CEO of NSE, stated that the exchange would begin working on its Draft Red Herring Prospectus (DRHP) as soon as it receives the official NOC on paper. He estimated that preparing the DRHP and related offer-for-sale (OFS) documents would take approximately three to four months. The entire process, from receiving the NOC to the final listing, is projected to take about eight to nine months, placing a potential listing timeline in the second half of 2026.

A Decade-Long Saga: The Co-Location Controversy

The journey to this point has been long and complex. NSE first filed its DRHP in December 2016, planning a ₹10,000 crore public issue. However, the process was halted after SEBI initiated investigations into serious governance lapses, most notably the co-location scandal. The regulator found that certain brokers were allegedly given preferential access to NSE's trading systems, providing them an unfair advantage. This was treated as a significant violation of market integrity, leading to enforcement actions, hefty fines, and a freeze on the IPO process.

Resolving Past Issues: Governance and Settlements

To regain regulatory confidence, NSE has undertaken a comprehensive overhaul of its internal systems. This included significant changes in senior management, a restructuring of its board, and the enhancement of its compliance and governance frameworks. A critical step towards resolution was the settlement of pending regulatory cases. NSE made provisions of around ₹1,300 crore to settle the co-location and dark fibre matters with SEBI. This move demonstrated the exchange's commitment to addressing past issues and was instrumental in breaking the regulatory deadlock.

Projected IPO Timeline

With the primary regulatory hurdle nearly cleared, the timeline for the NSE IPO is becoming clearer. The following table outlines the expected sequence of events leading to the listing.

Financial Strength and Market Dominance

The anticipation surrounding the NSE IPO is fueled by its formidable financial performance and dominant market position. The exchange reported a consolidated net profit of ₹2,924 crore for the first quarter of FY26. Despite provisions for settlements impacting Q2 FY26 profits, its underlying operational strength remains robust. The exchange's grey market valuation has reportedly soared to approximately ₹4.7 lakh crore, reflecting strong investor demand. NSE maintains a commanding market share of 93-94% in the cash market and has recovered its equity options market share to 87%.

Market Impact and Future Outlook

The listing of NSE is expected to be a landmark event for India's capital markets. It will not only unlock value for its existing shareholders but also allow public investors to own a stake in the country's primary market infrastructure. The government has also approved a 2.5% dilution of its stake in the exchange, further paving the way for the public issue. As the exchange prepares for its next growth phase with new products like gold and natural gas futures, the IPO is seen as a catalyst that will enhance transparency and corporate governance.

Conclusion

After years of uncertainty, the path for the National Stock Exchange's IPO is finally clear. SEBI's in-principle approval has removed the most significant obstacle, and the exchange is now on a defined timeline towards a public listing in 2026. As NSE finalizes its preparations and awaits the formal NOC, the Indian market is gearing up for what could be one of its largest and most significant public offerings, marking a new chapter for the exchange and the broader financial ecosystem.