NSE IPO: SEBI in-principle nod to ₹1,388-crore deal

What SEBI’s in-principle clearance means

SEBI has provided in-principle clearance to the National Stock Exchange’s proposal to settle the long-running co-location and dark fibre matters for ₹1,388 crore. The regulator’s stance was articulated publicly by SEBI chairman Tuhin Kanta Pandey, who said the application is being examined by multiple committees, but that SEBI is aligned with the settlement in principle. For NSE, the development removes a major regulatory overhang that has delayed its listing plans for years. The settlement is positioned as a key step toward NSE securing a no-objection certificate (NOC) from SEBI for its initial public offering. Pandey has also indicated that the NOC could be issued within about a month.

The disputes have historically centred on allegations of preferential access and latency advantages in NSE’s trading infrastructure. Under SEBI’s settlement framework, such resolutions typically do not involve an admission of wrongdoing by the settling entity. This procedural feature is explicitly part of SEBI’s established framework for negotiated resolutions. Even so, the settlement is being treated as a meaningful turning point because it could allow NSE to restart formal work on its IPO filings once the process is concluded.

The settlement amount and what NSE has already set aside

NSE’s settlement proposal is pegged at ₹1,388 crore, and the exchange has also described the broader settlement as being “around ₹1,400 crore” in different disclosures and reports. In financial disclosures released in November 2025, NSE made a provision of ₹1,297 crore, in addition to ₹100 crore already deposited earlier with SEBI under a Securities Appellate Tribunal (SAT) order passed in 2023. Interest at 12% is applicable until final settlement, as per the information provided.

Separately, Reuters reported that NSE set aside nearly ₹1,300 crore (₹13 billion) to settle pending regulatory cases, describing it as NSE’s first-ever financial recognition tied to its ongoing legal disputes. The same report noted that NSE filed two separate settlement applications amounting to ₹1,387 crore (₹13.87 billion). Across disclosures and reports, the consistent signal is that NSE has ring-fenced a large part of the settlement outgo and is attempting to close the matter through SEBI’s settlement mechanism.

How the case reached this stage: key milestones since 2019

The co-location case has moved through several regulatory and appellate steps. In 2019, SEBI ordered NSE to disgorge ₹62.58 crore and barred certain senior officials. In 2022, SEBI imposed a ₹7 crore penalty, which was later overturned by SAT. During 2023-24, SEBI appealed the SAT ruling in the Supreme Court.

In 2025, NSE filed a settlement application and agreed to pay around ₹1,400 crore. The settlement plea was submitted in June 2025. The expectation outlined in the provided information is that, once concluded, the settlement process will eventually lead to the withdrawal of the case from the Supreme Court, formally closing the chapter.

Why Supreme Court oversight still matters

Because SEBI has already challenged an earlier SAT ruling in the Supreme Court, the settlement cannot proceed without judicial oversight. Under SEBI’s settlement rules, when proceedings are pending before a court, both SEBI and the settling entity must place the agreement before the relevant court. This additional step is significant because it introduces a sequencing requirement: SEBI’s in-principle acceptance and internal evaluation are not, by themselves, the end of the process.

The information provided also indicates that once NSE pays the settlement amount, SEBI is anticipated to issue a closure order as required under its settlement regulations. But that closure depends on the legal and regulatory formalities being completed, including the court-related process where applicable.

SEBI’s committee process: what happens next

The settlement proposal will undergo scrutiny by SEBI’s Internal Committee and High-Powered Advisory Committee. These panels will evaluate the terms before the matter is placed before SEBI’s whole-time members for a final decision. The description of this phased review underscores SEBI’s procedural approach to settlements, with multiple layers of evaluation.

For investors tracking NSE’s IPO prospects, the key takeaway is that “in-principle” does not mean “final.” It signals broad alignment, but the settlement still moves through internal review and, due to the pending Supreme Court matter, requires judicial oversight before it can be fully operationalised.

The IPO angle: refiling draft papers and the NOC

NSE has been attempting to go public since 2016, but its plans were stalled due to the co-location case. The settlement is described as a key step toward getting a no-objection certificate from SEBI, which is needed for the IPO process to move ahead. Once the settlement’s legal and regulatory formalities conclude, NSE may resume work on refiling its draft prospectus.

Reports also indicate a possible near-term sequence: an NOC expected later this month and draft papers planned by end-March. The exchange is stated to be in discussions with investment bankers and law firms to finalise the prospectus and assess investor appetite.

Other settlements around NSE’s regulatory issues

Beyond the co-location and dark fibre matters, NSE paid ₹643 crore in October 2024 to settle a case linked to bypassing of the trading access point (TAP) system. That settlement covered NSE and several former senior executives. Another report noted that NSE recently paid ₹40 crore to settle a compliance-related case after SEBI passed a settlement order.

The same set of information also flags that even after the co-location and dark fibre settlement, legacy cases involving some former NSE executives and brokers will continue. This is an important distinction for readers: the exchange’s proposed settlement is aimed at resolving its own regulatory overhangs, while certain individual-level or broker-linked proceedings may remain active.

Market signals: unlisted NSE shares and valuation references

The reported regulatory clarity has also been linked to movements in the unlisted market. One report said NSE shares in the unlisted market rallied 10%-15% over recent days on renewed IPO speculation. That report also referenced a valuation of around ₹5 lakh crore in the unlisted market context.

These data points are not listed-market signals, but they are widely tracked as sentiment indicators for a potential IPO. They also help explain why regulatory milestones like an in-principle settlement acceptance can have immediate knock-on effects on private market pricing.

Timeline and numbers at a glance

Why the settlement is a turning point

The settlement proposal of ₹1,388 crore is being framed as one of the largest regulatory overhangs in the Indian capital market, given NSE’s role as the country’s largest bourse and the long duration of the case history. The fact that SEBI has given in-principle approval indicates movement toward resolution, but the process still must pass through committee scrutiny, whole-time member approval, and Supreme Court oversight because of pending appeals.

If the settlement closes with a SEBI closure order and the related court process is concluded, the practical outcome described is that NSE can move toward refiling IPO documents and completing the required regulatory checks. NSE CEO Ashish Chauhan has earlier indicated that the exchange’s listing could take place around nine months after receiving the NOC.

Conclusion

SEBI’s in-principle acceptance of NSE’s ₹1,388-crore settlement proposal marks a concrete step toward resolving the co-location and dark fibre matters that have weighed on the exchange’s IPO plans since 2016. The immediate next steps are SEBI’s multi-committee review, whole-time member decision-making, and Supreme Court oversight given the ongoing appeals. If these steps are completed and the settlement amount is paid, SEBI is expected to issue a closure order under its settlement regulations, after which NSE may resume the process of refiling its IPO papers.