NSE IPO to take time, decision on new CEO soon, says Sebi chief Ajay Tyagi

IPO will see existing shareholders offloading 20-25% shares to public through the offer OFS route

Sebi chief Ajay Tyagi on Wednesday said the initial share sale of NSE will "take time" as co-location issues need to be sorted out while a decision is likely soon on the exchange's appointment of Vikram Limaye as new CEO.

Limaye, currently chief of IDFC, was selected by the board of the National Stock Exchange (NSE) in February.

The exchange has already received approval from shareholders and board on the appointment of Limaye as new Managing Director and CEO of the NSE. Now, the bourse is awaiting Sebi nod.

Asked as to when this approval can come through, Tyagi said: "We had sought certain additional information which has been given to us three to four days back. So, we will decide very soon."

NSE, which filed its draft papers with regulator Sebi in December to raise an estimated over Rs 10,000 crore through IPO, is also waiting for the regulator's go-ahead.

Replying to a query on NSE's IPO, Tyagi said, "That will take time as the NSE itself wants that co-location issue to be sorted out. It will take some time."

The IPO will see existing shareholders offloading 20-25 per cent shares to the public through the offer for sale (OFS) route.

The offer may give the exchange a valuation of Rs 50,000 -55,000 crore, officials said, adding that the IPO itself could be worth about Rs 10,000 crore.

The bourse is facing regulatory scrutiny for allegedly providing preferential access to some entities with respect to co-location and algo trade facilities.

Besides, Sebi will soon put in place norms to check any misuse of the high-frequency trade.

Talking about the timeline on high frequency, Tyagi said "there was discussion paper last year and so it is something which Sebi has only just learnt about. It is a complicated issue and so, we have just learnt of it. We want to come out with proper regulations. But we will proceed very quickly."

High frequency trading, also called algorithmic trading or algo in market parlance, refers to orders generated at a super-fast speed by use of advanced mathematical models that involve automated execution of trade, and it is mostly used by large institutional investors. HFT exposes the market to possible systemic risks.

The Sebi chief also said the regulator will expedite the pending issues.

Asked about how the legacy issues like NSEL, algo stack up against his earlier job with the finance ministry, Tyagi said "with the finance ministry, it was more about policy issues".

"Here (as Sebi chairman), it is a deep dive into capital markets and trying to learn what are the issues. It is a different sort of an experience. But on the pending issue, I have taken stock and I can only assure that we will expedite them. You will see the result soon," he added.