NSE IPO faces potential two-year delay amid regulatory concerns: Report

NSE had initially filed its IPO prospectus in December 2016. However, the exchange’s request for a no objection certificate (NOC) from SEBI, submitted in August last year, remains pending. For now, NSE must collaborate with SEBI to address these concerns before it can move forward with the listing.

The unexpected delay casts uncertainty over one of the most highly awaited stock market debuts in India. Industry insiders argue that some of the concerns raised by SEBI fall outside its regulatory purview and are unrelated to the IPO. Despite this, NSE will have to navigate the regulatory hurdles before securing approval for its public listing.

In a major development earlier this week, NSE shares, which previously took over a month to transfer between shareholders, can now be transferred within a week. This improvement follows the activation of NSE’s International Securities Identification Number (ISIN), which has changed the share status to "defreezed."

With this update, the process of transferring NSE shares has become more efficient. Earlier, buying NSE shares required a lengthy approval process involving two stages—Know Your Customer (KYC) verification and a "fit and proper" assessment by the exchange. Now, with the ISIN status updated, depositaries will handle the verification, eliminating the need for NSE’s direct intervention.

The move is expected to enhance liquidity in NSE shares, improve trading volumes in the unlisted market, and attract more investors. Currently, the exchange has over 20,000 shareholders, and with a streamlined transfer process, investor participation in NSE’s unlisted shares is likely to grow.