NSE offers Rs 1,000 crore to settle SEBI case, revive IPO

By Savio Shetty, Ruchi Bhatia and Chiranjivi Chakraborty

The National Stock Exchange of India Ltd. is said to be offering a record amount of about Rs 1,000 crore to settle a longstanding dispute with the country’s market regulator, according to a person involved in the discussions, likely paving the way for its public listing.

The Securities and Exchange Board of India will discuss the offer, and a decision is expected soon, people familiar with the matter said, asking not to be identified as the discussions are private.

The regulator is inclined to settle the legal issue, they said, which would enable the world’s largest derivative exchange by contracts to secure a no-objection certificate.

SEBI had previously halted NSE’s listing plans due to several ongoing cases dating back to 2015, involving allegations that some high-speed traders gained unfair access to its co-location servers.

The regulator’s investigation not only derailed the exchange’s IPO ambitions in 2016, but also later resulted in the NSE being banned from accessing capital markets for six months.

The NSE in October paid Rs 640 crore to the regulator to settle a case involving alleged unfair access to its trading platform. 

An email sent to SEBI’s press office was unanswered, while a NSE spokesperson declined to comment.

Signs of a potential settlement emerged after SEBI’s newly appointed Chairman Tuhin Kanta Pandey said last week that the regulator is working closely with the NSE to resolve issues hindering its IPO.

Following the exchange’s annual earnings earlier this month, Chief Executive Officer Ashish Kumar Chauhan told analysts and investors that the regulator had identified four areas requiring resolution, including pending legal cases.

Meanwhile, investor interest in NSE remains robust. The exchange, backed by investors like Life Insurance Corp. of India and Canada Pension Plan Investment Board, has seen its private market valuation jump from $36 billion in September to $50 billion, according to a marketing material posted on Linkedin last week by US-based investment firm Drew Investments. 

Drew Investments is raising a special purpose vehicle to invest in NSE at Rs 1,550 rupees to Rs 1,700 per share.