NSE won’t debut on NSE: CEO explains why the exchange must list elsewhere for its IPO

NSE Shares to be Listed on Bombay Stock Exchange

The National Stock Exchange (NSE) has announced that it will not list its shares on its own platform when it goes public, citing Indian regulations. In an interview with ANI, Managing Director and Chief Executive Officer Ashish Chauhan explained that as a regulated institution, the NSE cannot regulate itself and must therefore list on an alternative exchange.

Regulatory Framework

India's regulatory framework prohibits stock exchanges from self-listing, citing conflict-of-interest considerations. While some global exchanges such as Intercontinental Exchange (ICE) are listed on their own trading platforms, India's rules do not allow such an arrangement.

NSE's IPO Process

• The Securities and Exchange Board of India (SEBI) has granted the NSE a no-objection certificate, clearing the way for its initial public offering (IPO).
• The exchange will seek listing on another recognised exchange, such as the Bombay Stock Exchange (BSE).
• The proposed IPO will be structured as an Offer for Sale (OFS), with no fresh capital being raised by the exchange.
• Existing shareholders will be invited to indicate whether they wish to sell shares as part of the IPO.
• The NSE currently has nearly 195,000 shareholders who collectively own 100 percent of the exchange.

Valuation Estimates

Valuation estimates circulating in the market, including figures around USD 50 billion, should be taken with a pinch of salt, according to Chauhan. Pricing decisions are typically finalised closer to launch and depend on prevailing market conditions.

Listing and Trading

Listing enables broader participation and enhances liquidity for shareholders, while trading can take place across multiple platforms, subject to regulatory approvals. The NSE's shares could potentially be traded across multiple platforms, subject to regulatory approvals.

Benefits of Public Listing

• Promotes transparency and governance.
• Enhances accountability and openness.
• Provides liquidity to existing shareholders.
• Strengthening the ecosystem for small and medium enterprises (SMEs).

India's Capital Market

India has positioned itself as a cost-effective and inclusive capital market, particularly for SMEs. Listing costs in developed markets such as the United States can range between USD 20 million and USD 30 million, making smaller public fundraises economically unviable.

Operational Traction

India's market structure, supported by government policies and SEBI regulations, enables companies of varying sizes to access public capital without disproportionate costs. The ecosystem of merchant bankers, legal advisors, and compliance professionals has evolved to support SME listings.

Chauhan highlighted the operational traction of India's SME platforms, contrasting them with international efforts such as London's Alternative Investment Market (AIM), which has struggled in recent years, and similar attempts in Japan.

Quotes

"It's a regulation of India, and we have to abide by that." – Ashish Chauhan, Managing Director and Chief Executive Officer, NSE

"You have to take it with a pinch of salt, right? Because what happens on the actual listing, you don’t know." – Ashish Chauhan, Managing Director and Chief Executive Officer, NSE

"The Indian stock market is very, very inclusive, not only for the investors, but also for the companies." – Ashish Chauhan, Managing Director and Chief Executive Officer, NSE