NSE IPO Approval Likely by Jan-End, SEBI Chief Signals Go-Ahead

Introduction: A Major Step Forward for a Landmark IPO

The Securities and Exchange Board of India (SEBI) is expected to issue a no-objection certificate (NoC) for the National Stock Exchange's (NSE) initial public offering (IPO) by the end of January 2026. SEBI Chairman Tuhin Kanta Pandey provided this indication at a market convention in Chennai, signaling a significant breakthrough for one of India's most awaited public listings. The announcement has revived investor interest and set a potential timeline for an IPO that has been delayed for nearly a decade due to regulatory hurdles.

Unlisted Market Reacts Swiftly

The chairman's comments triggered an immediate and positive reaction in the unlisted market, where NSE shares are actively traded. The share price climbed to ₹2,050, a notable increase from its previous trading range of ₹1,875 to ₹1,950. This surge reflects renewed confidence among investors who have been closely monitoring the IPO's progress. According to Narinder Wadhwa, founder of SKI Capital Services, activity on the counter is expected to increase following the news. The current price is still below its June 2025 peak of ₹2,375-₹2,400 but shows a strong recovery from its March 2025 base of ₹1,550.

The Regulatory Process Ahead

Receiving the NoC is a critical but preliminary step in the listing process. A NoC from SEBI is mandatory for any market infrastructure institution planning to go public. Once the certificate is granted, the NSE will proceed with the next phases. This involves appointing merchant bankers and legal advisors to prepare the Draft Red Herring Prospectus (DRHP). The DRHP, a comprehensive document detailing the company's financials and the offer's terms, will then be submitted to SEBI for final approval. Industry experts estimate that if the NoC is issued by January-end, the exchange could potentially be listed by August or September 2026, following a two-month period for document filing after formal presentations in February.

A History of Delays and Regulatory Scrutiny

The NSE's journey to an IPO has been long and complex. The exchange first filed its DRHP in December 2016, but the process was halted due to serious regulatory investigations into alleged corporate governance lapses. The primary issues were the co-location and dark fiber controversies, which involved allegations that certain brokers were given unfair preferential access to the exchange's trading systems. These investigations led to a prolonged delay of nearly nine years. To resolve these legacy issues, the NSE recognized a provision of ₹1,297 crore in the September 2025 quarter for settlement applications filed with the regulator.

Market Valuation and Competitive Landscape

The potential IPO is expected to be one of the largest in the history of the Indian stock market, with a prospective valuation of around ₹7.00 trillion. This represents a significant premium over its current unlisted market capitalization of ₹5.07 trillion. The valuation positions the NSE as a dominant force, far ahead of its listed competitor, the BSE.

Expanding Retail Investor Base

Over the past year, the NSE has witnessed a significant increase in its retail investor base, indicating growing public interest in owning a stake in the country's largest bourse. The shareholding pattern shows a clear trend of rising retail participation, while foreign and corporate holdings have seen a slight decline.

Broader Market Implications

The progress on the NSE's IPO is expected to create positive momentum for other capital market-related entities in the unlisted space. Other exchanges, such as the agricultural derivatives bourse NCDEX and the Metropolitan Stock Exchange of India (MSEI), are also preparing to launch their own equity segments. The successful listing of the NSE could pave the way for these institutions and boost overall investor sentiment in the sector.

Conclusion

The statement from the SEBI Chairman marks a pivotal moment for the National Stock Exchange's long-awaited IPO. While the issuance of a NoC is a crucial step, the path to a final listing still involves several months of regulatory procedures and documentation. Investors will be watching closely as the exchange moves to file its DRHP and navigates the final stages of approval. If the timeline holds, the Indian market could witness a landmark public offering in the second half of 2026.