The unlisted shares of the National Stock Exchange (NSE) are witnessing a significant surge, hitting record highs amidst renewed optimism surrounding its long-awaited Initial Public Offering (IPO). This surge is fueled by speculation that NSE is nearing a resolution with the Securities and Exchange Board of India (SEBI) regarding longstanding regulatory disputes.
Investor anticipation is building as NSE has reportedly offered a record settlement of approximately $118 million (Rs 10 billion) to SEBI in an attempt to resolve the co-location case, which has been a major impediment to its IPO plans. If accepted, this settlement could pave the way for SEBI to issue the crucial no-objection certificate (NOC), a prerequisite for NSE's public listing. The exchange's MD & CEO Ashish Chauhan confirmed that they've formally asked SEBI for a No Objection Certificate (NOC), the first real step to filing for an initial public offer (IPO).
The co-location controversy, which dates back to 2015, involves allegations that certain high-frequency trading firms were given preferential access to NSE's servers, enabling them to gain an unfair advantage in the market. This led to SEBI shelving NSE's IPO plans in 2016 and imposing a six-month ban on the exchange's access to capital markets.
NSE has been actively working to address these regulatory concerns. In October 2024, the exchange paid $75 million (Rs 6.4 billion) to settle one of the regulatory cases linked to preferential access. The current settlement offer of $118 million is intended to comprehensively resolve all outstanding issues with the regulator.
SEBI's newly appointed chairman, Tuhin Kanta Pandey, has indicated a willingness to resolve the issues and allow NSE to proceed with its IPO. He confirmed that the regulator is working collaboratively with NSE to address the bottlenecks affecting its IPO. SEBI has set up an internal committee in March 2025 to examine its IPO readiness. His recent statement has sparked renewed optimism in the market.
The positive sentiment surrounding the potential IPO has led to a significant increase in the price of NSE's unlisted shares in the grey market. The unlisted shares have climbed to a record high of Rs 2,100. Some reports indicate that the stock surged more than 50 per cent within a week, trading around Rs 2,300 in the pre-IPO market, up from Rs 1,500 the previous week. This surge reflects growing investor confidence that the IPO is within reach.
Beyond the IPO buzz, NSE's strong fundamentals also contribute to investor confidence. As the largest stock exchange in India by volume and the world's largest derivative exchange, NSE plays a critical role in the country's financial infrastructure. The exchange generates revenue through various sources, including transaction fees, data access charges, co-location services, and listing fees. For the financial year 2024-25, NSE posted a 16 per cent year-on-year (YoY) rise in revenue at Rs 17,141 crore and 47 per cent YoY surge in its net profit at Rs 12,188 crore. The leading stock exchange also announced a dividend of Rs 35 per share.
The potential listing of NSE is not just significant for the exchange itself but also for the Indian capital markets as a whole. A successful IPO would mark the end of a near decade-long regulatory standoff and could usher NSE into the capital markets with full investor backing and renewed credibility. Ahead of NSE IPO nod, National Stock Exchange of India's valuation surges 60% to $58 billion. At $58 billion, NSE's potential IPO valuation would surpass Nasdaq Inc.'s market value and approach Deutsche Boerse AG's $62 billion valuation, according to reports.
