NSE IPO Plan Hit by Legal Challenge: Here’s All We Know

National Stock Exchange of India’s long-awaited public listing plan has been hit by another legal roadblock after a writ petition was filed in the Delhi High Court. The petition challenges the no-objection certificate (NOC) issued by the Securities and Exchange Board of India for NSE’s proposed public listing. According to The Economic Times (ET), a petition filed by Delhi resident K.C. Aggarwal challenges Sebi’s January 30 approval for the IPO process at NSE. Aggarwal has alleged that the IPO clearance was granted despite pending statutory lapses, lack of transparency in fund flows and broader systemic concerns. Aggarwal has alleged that NSE failed to follow this framework correctly. Instead of adjusting both the contract price and quantity, the exchange allegedly modified only the price while directly debiting dividend-equivalent amounts from the accounts of derivatives traders, including his own. He argued in the petition that, under the Securities Contracts (Regulation) Act, dividends are payable only to shareholders and not to derivatives traders, making “the impugned debit… ultra vires the statute”. The petitioner further claimed that his complaints to NSE were closed without granting him a hearing, while Sebi upheld the exchange’s actions without conducting an independent review. Requests filed under the Right to Information (RTI) Act seeking details of the debited funds were repeatedly denied, resulting in what he described as a “complete information vacuum”. Emails sent to the Sebi chairperson had also remained unanswered as of January 2026. Aggarwal’s complaint to the market regulator alleged that funds were wrongfully collected from derivatives traders under the guise of CAA, in breach of Sebi’s own rules, raising concerns around investor protection and market integrity. He had urged the regulator to withhold any approval for NSE’s IPO until the matter was fully examined and resolved. How the Dispute Began It is important to note that a separate appeal by Aggarwal to the Delhi High Court regarding modification to his futures option was sent to arbitration in May last year. The dispute arose after K.C. Aggarwal executed stock futures trades in 32,500 shares of Indian Oil Corporation Limited on February 4 and 5, 2021 at an average price of ₹103.55, which were squared off on February 11, 2021 at ₹96.74. While he claimed he was entitled to ₹2,21,325 from the transaction, his account was instead debited by ₹22,175, which he alleged was a wrongful deduction on account of Corporate Action Adjustment (CAA), prompting him to seek a total recovery of ₹2,43,500 from broker ICICI Securities Limited. A legal notice was served on February 27, 2021, followed by a complaint on March 26, 2021 via NSE’s NICEPLUS portal, after the broker attributed the debit to CAA in line with Sebi circulars dated December 16, 2016 and July 5, 2018. Aggarwal then filed a civil suit seeking recovery and a permanent injunction against what he termed an illegal CAA practice; however, on November 17, 2021, the Civil Judge referred the matter to arbitration citing the Account Opening Form (AOF). This was upheld by the Delhi High Court on July 19, 2023, which ruled that arbitration was mandatory. A Section 21 arbitration notice was subsequently issued on September 17, 2023 seeking appointment of an arbitrator through DIAC, but NSE replied on October 10, 2023 stating that the arbitration agreement existed only with ICICI Securities and that the exchange could not be made a party, even as the petitioner alleged he was being compelled to arbitrate via NSE’s ODR portal. Later, K.C. Aggarwal filed a petition seeking appointment of an arbitrator in the case. He also argued that the dispute was tripartite, involving both the broker and the exchange and sought arbitration outside NSE’s Online Dispute Resolution (ODR) mechanism; however, NSE contended that the arbitration agreement existed only between the investor and ICICI Securities. The Delhi High Court held that since a valid arbitration clause existed in the Account Opening Form between the investor and the broker, the dispute must be resolved through arbitration as per agreed NSE rules, limiting the court’s role under Section 11(6) of the Arbitration Act to verifying the existence of the arbitration agreement. NSE’s board recently approved an offer-for-sale by existing shareholders after receiving Sebi’s clearance in January and also set up a committee to oversee listing-related activities, chaired by non-independent director Tablesh Pandey with the CEO as a member. In addition, NSE appointed Walker Chandiok & Co as its statutory auditor for a five-year term, replacing Price Waterhouse & Co, as it moves ahead with what could be one of the country’s largest public offerings.