Home Listing rules NSE: IPO of NSE likely to be delayed by one year; Sebi said he was in no rush to nod

NSE: IPO of NSE likely to be delayed by one year; Sebi said he was in no rush to nod

Mumbai: Investors in India’s biggest stock exchange may have to wait even longer for an exit through an initial share sale after regulatory probes into former National Stock Exchange (NSE) officials for alleged violations further delayed the timelines for a public listing.

With market regulator Sebi’s latest order on NSE for violating securities contract rules and a subsequent investigation launched by other agencies such as Income Tax and the Central Bureau of Investigation (CBI) against the Former CEO Chitra Ramkrishna, the sale of NSE shares is likely to be delayed by at least a year, bankers said.

“Sebi is unlikely to give NSE the green light to go public with the current situation, and it may take another year or so to clean up the whole system,” a senior bank official said. investment. “More actions against all involved in the roommate scam and violation of securities contract rules are likely in the coming months from various agencies. Until then, the regulator may not consider NSE’s request to go public.”

Email queries sent to Sebi and NSE received no response

NSE filed its Draft Red Herring Prospectus (DRHP) with Sebi on December 28, 2016, for an offer to sell up to 111.4 million shares by existing investors. However, the market regulator has asked the exchange to take back the DRHP due to an ongoing investigation into the colocation scam, bankers said.

According to insiders, foreign investors in the exchange wanted the exchange to go public a decade ago, but it was delayed due to various controversies including the co-location case.

In August 2016, the board appointed Citibank, JM Financial, Kotak Mahindra and Morgan Stanley as lead bankers for the IPO.

On October 4, 2016, NSE’s Board of Directors passed a resolution for an initial public offering and subsequent listing of the shares.

Before Sebi placed orders against NSE and its former senior officials in the collocation deal, expectations were high about the likelihood of an IPO in 2022.

However, large institutional investors are unlikely to pull back in the current situation. The share price on the unofficial gray market has almost quadrupled in the past two years from ₹850 to ₹3,400 currently. Brokers said demand for unlisted NSE shares remains robust, but there are no big sellers due to the exchange’s strong earnings track record.

India’s largest stock exchange reported a 56% increase in year-on-year net profit to ₹3,518 crore for the nine months ending December 2021.