A group of investors, led by the People Activism Forum, has moved the Delhi High Court, urging the Securities and Exchange Board of India (Sebi) to approve the National Stock Exchange’s (NSE) Initial Public Offering (IPO). The investors claim that Sebi’s prolonged delay in granting the necessary approval for the IPO is unjustified and is harming both shareholder value and the opportunity for the public to access the country’s largest stock exchange.
In a legal affidavit, the People Activism Forum highlighted that although the NSE re-applied for the No Objection Certificate (NOC) from Sebi on August 27, 2024, the regulator has yet to provide any valid explanation for withholding approval. This has led to significant frustration among existing shareholders, who are unable to unlock the value of their investments. The delay also means the general public is being denied an opportunity to invest in the highly sought-after NSE shares, which have seen a significant rise in the unlisted market, from Rs 900 to Rs 1,800 this year, largely due to IPO expectations.
Key NSE Stakeholders and Recent Developments
The NSE has made recent moves, including distributing four bonus shares for every existing share in November 2024. Key stakeholders in the exchange include:
- Life Insurance Corporation (LIC): 10.72%
- Radhakishan Damani (D-Mart founder): 1.58%
- Stock Holding Corporation & SBI Capital Markets: 4.4% each
- State Bank of India (SBI): 3.23%
- Aranda Investments (foreign investor): 5%
Despite these efforts, Sebi has yet to approve the IPO, citing unresolved issues stemming from the co-location scam, which the NSE addressed by submitting all required compliance documents.
This is not the first time the People Activism Forum has sought intervention. The Forum initially filed its petition in May 2024, after which Sebi requested NSE to reapply for the NOC. Despite the NSE’s reapplication, Sebi has continued to resist the Forum’s petition. Sebi has questioned the Forum’s standing in the case, warning that a favorable ruling might encourage third-party interventions. Moreover, Sebi has cited the co-location scam, which had previously led to the withdrawal of the NSE’s IPO application in 2019, as a reason for withholding approval. However, the case was closed in September 2024, with no substantial evidence to pursue further action.
The Delhi High Court is set to hear the case on March 6, 2025, providing investors hope for a swift resolution. They believe that an expedited IPO approval process would help bring the NSE under the stricter regulatory framework that governs listed entities, enhancing transparency and investor confidence.
Investors are eager for Sebi’s approval of the NSE IPO, which they believe will unlock significant value for shareholders and provide the public with access to one of the most prominent financial institutions in India. As the legal battle continues, the hope is for a favorable outcome that will enable the NSE to proceed with its much-awaited public listing.
