NSE’s Long-Awaited IPO May See Further Delay Amid Fresh Legal Hurdle

NSE's IPO Plans Hit by Fresh Writ Petition

India's largest stock exchange, the National Stock Exchange of India (NSE), has encountered another hurdle in its decade-long bid to go public.

• The latest challenge comes in the form of a writ petition filed in the Delhi High Court contesting the no-objection certificate (NOC) granted by the Securities and Exchange Board of India (Sebi)
• The petition was moved by 72-year-old KC Aggarwal, a New Delhi resident and former judicial officer, on February 10

The development could once again delay NSE's long-awaited listing, which has been pending since 2016 amid regulatory scrutiny and past controversies.

Key Issues and Concerns

• Corporate Action Adjustments (CAA): Aggarwal's petition revolves around Sebi's framework on CAA, which aims to maintain "value neutrality" in derivatives trading
• Failure to Adhere to Framework: The petitioner alleges that NSE failed to adjust both price and quantity in derivatives contracts, instead debiting dividend-equivalent amounts directly from derivatives traders' accounts
• Dividend Payments: Aggarwal argued that dividends are payable only to shareholders and not to derivatives traders, calling the debit "ultra vires the statute"
• Investor Protection and Market Integrity: The petitioner raised concerns about off-market derivative transactions and broader implications for investor protection and market integrity

The Delhi High Court is expected to hear the matter later this week, and its ruling may shape the next course of action for the exchange's IPO plans.

Previous Attempts and Regulatory Scrutiny

• NSE's IPO History: The exchange first filed its application with Sebi on October 18, 2016, but approval was initially withheld due to concerns linked to the co-location case, governance lapses, and technology infrastructure issues
• Sebi's Review: After Tuhin Kanta Pandey assumed office as Sebi chief in March 2025, he constituted an internal committee to examine issues related to the NSE IPO

Despite these concerns, Sebi granted the NOC on January 30, allowing NSE to formally initiate the IPO process, including appointing merchant bankers and legal advisers and preparing draft listing documents.

NSE's IPO has been among India's most closely watched and prolonged listing efforts.