Why NSE shares won't list on NSE: CEO Ashish Chauhan explains; IPO set to be pure OFS

The National Stock Exchange (NSE) shares will not be listed on its own platform when it goes public, said Managing Director and Chief Executive Officer Ashish Chauhan, stressing that Indian regulations do no permit exchanges to self-list. "It's a regulation of India, and we have to abide by that," Ashish Chauhan told news agency ANI, explaining that as a regulated institution, the NSE cannot regulate itself and must therefore list on an alternative stock exchange. His remarks come after NSE was granted a no-objection certificate by the Securities and Exchange Board of India (Sebi) in January, putting an end to nine years of waiting. Chauhan also noted that the exchange will need a few months to prepare and file its Draft Red Herring Prospectus (DRHP). Once submitted, Sebi will examine the document and decide on the further steps of clearance. Unlike regular listed entities, market infrastructure institutions, such as stock exchanges, depositories, and clearing corporations, must receive a no-objection certificate from the markets regulator before filing their DRHP. Where else will NSE get listed? Under India's regulatory requirements, NSE cannot list on its own platform and will instead have to debut on an alternative exchange, such as the Bombay Stock Exchange (BSE) or another recognised bourse. Some global exchange operators, such as Intercontinental Exchange (ICE), the parent company of the New York Stock Exchange (NYSE) are listed on their own trading platforms, however, India's regulatory framework does not allow such an arrangement. Though NSE would be listed on another platform, its shares could potentially be traded across multiple platforms, subject to regulatory approvals. According to Chauhan, the public listing would enable wider investor participation and improve liquidity for shareholders. NSE IPO to be entirely OFS? Here's what it means NSE will not raise any fresh capital from the proposed IPO. Instead, it will be structured entirely as an Offer for Sale (OFS), which means existing shareholders will sell part of their stake to the public. This development was also reported by Mint earlier. Chauhan told ANI that NSE will first ask its existing shareholders whether they want to sell a portion of their shares in the IPO. Since the issue is structured as an OFS, the entire proceeds from the sale will go directly to those shareholders who choose to sell, and not to the company. Currently, the stock exchange has nearly 195,000 (1.95 lakh) shareholders, and together they own 100% of the exchange. The NSE chief also described the proposed IPO as largely procedural, which aims to provide liquidity to existing investors rather than funding expansion. He also noted that the exchange is profitable enough to meet its growth plans. The stock exchange might see a 4-4.5% stake sale, which might take up to eight months, Chauhan had told reporters earlier this month.