NSE's Decade-Long Wait Nears Its End

Synopsis

On June 17, 2026, nearly a decade after its initial failed attempt in 2016, the world's largest derivatives exchange by volume, the National Stock Exchange of India (NSE) submitted its Draft Red Herring Prospectus (DRHP) to SEBI. The IPO will raise an estimated fund of ₹25,000–30,000 crore for the existing shareholders, in a pure Offer for Sale of around 14.89 crore shares. The proceeds will not go to NSE. It is said that the objective is to list before the end of 2026.

A Ten-Year Detour to Dalal Street

The National Stock Exchange first applied to go public in 2016. What ensued was not a list but a decade of entanglements – a co-location scam, governance problems and a settlement process that has taken years and almost ₹2,000 crore in total.

NSE had originally applied for IPO in 2016 but pulled the plug as a regulatory investigation started. India's biggest stock exchange was closer than ever to its long-awaited debut in the market with the settlement talks coming to a close and the Securities and Exchange Board of India (SEBI) giving the thumbs-up to the listing.

The final regulatory approval was in January 2026. After a decade long wait, on January 30, 2026, SEBI had issued its No Objection Certificate to NSE — the regulatory clearance which is mandatory for any market infrastructure institution to launch a public issue.

This marks the official launch of the final act in one of the most impactful and lengthy corporate governance stories in Indian history with the National Stock Exchange officially submitting its Draft Red Herring Prospectus with the Securities and Exchange Board of India on June 17, 2026

This is the Settlement That Unlocked the Path

The clearance wasn't free and easy

In June 2025, NSE had submitted its settlement application to the markets regulator SEBI for settlement of co-location, dark fibre cases besides which would be the crucial step that eventually led to the NOC.

In June 2025, NSE had already made provisions of ₹1,297 crore in its books, as well as a ₹100 crore deposit after receiving an order from the Securities Appellate Tribunal, for closing the proceedings under the consent mechanism.

Said Sumit Agrawal, who served with SEBI and is now a Senior Partner at Regstreet Law Advisors: "NSE can now move towards updating and re-filing its offer documents, going through the SEBI review process and proceeding to a listing over the next couple of months

The Offering will consist of a Pure OFS

The IPO on the NSE is quite unique in comparison to almost all other major offerings of 2026. There is no fresh issue of shares. All the money raised is invested in shareholders, the individuals who purchased the shares.

The problem is that it's an Offer for Sale from current shareholders of as many as 148,905,525 shares, or about 6 per cent dilution. The indicative valuations indicate that the issue size would be in the range of ₹25,000–30,000 crore. The IPO does not involve any funds to be remunerated to NSE.

Major selling shareholders include the State Bank of India (24.75 million shares), MS Strategic Mauritius (16 million shares), Bank of Baroda, insurance companies and global institutional investors. According to reports, LIC is not involved in the existing OFS, which it has a major stake in the NSE.

The board of NSE had earlier approved the offering this year. NSE's board on 6th February 2026 formally approved the IPO plan and reconstituted its IPO committee which is now headed by Tablesh Pandey, who is an ex-LIC Managing Director and a non-independent director of NSE.

Financial Profile: A Business of Exceptional Margins

The core business is, as is his, powerful

In FY 26, NSE had total income of ₹18,713 crore and a PAT of ₹10,302 crore. The PAT margin is at 55.05 per cent, much higher than the PAT margin of the Nasdaq, which is around 21.53 per cent, and Return on Equity is at 32.98 per cent, which is one of the highest among the listed exchange operators globally.

The revenue has been increasing at 20.51 per cent CAGR during FY22–26. During the same time frame, NSE has supported total capital formation of ₹20.33 trillion, which includes 220 IPOs valued at ₹1.78 trillion in calendar year 2025.

The fee model of this exchange is structurally recurring, is volume-sensitive and is capital-light after the infrastructure is installed (transaction fees, listing fees, data products, indices and co-location revenues). None of the peers listed in India have margins as low.

Investors should consider the following risks:

The size of the business does not render it risk free. In its filing disclosures, NSE has particularly identified regulatory changes, reliance on derivatives markets, AI integration issues and conflict of interest as risks.

Being a regulated body, and acting as a frontline regulator, any changes in the policy of SEBI can directly affect their revenue structure and functioning.

In the past, SEBI has cracked down on Futures and Options trading. If further regulatory shrinkage occurs in the derivatives segment, as NSE has done, it could be a serious threat to transaction volumes.

There is also a governance aspect to look at which institutional investors will take a closer look at. Unlike other systems, the exchange does not have any clear promoters that can be identified; this could create the conditions for diffused oversight.

Besides this, the conflict of interest situation is a structural one: NSE's own shares are scheduled to be listed on the BSE, its main rival in the cash trading and derivatives markets, and that too well before the listing date, which will necessitate careful regulatory oversight much after.

The IPO is not just a financial call upon NSE. It is the stock market that is judging the institution that built them.