NSE's road to listing

After going back and forth for several months on its decision to go public, the National Stock Exchange of India (NSE) has finally decided to hit the market with its initial public offering (IPO), providing an exit to its institutional shareholders. The decision took some time coming. Here’s how it all panned out.



At its annual general meeting held last year in September, the exchange reportedly said it had initiated the listing process and had put forth a restructuring proposal to Securities and Exchange Board of India (Sebi). In December, Sebi amended the stock exchanges and clearing corporations (SECC) norms, making it easier for the stock exchanges to list their shares through an IPO.

Thereafter, shareholders gradually stepped up the pressure on the exchange to list. Arundhati Bhattacharya, chairman of State Bank of India (SBI), one of the largest shareholders in the exchange, stated that it wanted NSE to list to enable better price discovery for the bank’s stake sale. Other shareholders, notably private equity players, by way of emails and public statements, also urged the exchange to list.

On January 1 this year, Sebi notified its amended SECC norms, after which NSE began lobbying for self-listing, arguing that self-listing was a common practice internationally.

In February, the exchange board met and discussed a foreign listing in addition to listing in India. The exchange also formed a listing committee to accelerate the process of going public. Later, it toned down its stance on self-listing, saying it was okay with listing on rival BSE if all mandatory disclosures were allowed to be directly sent to either Sebi or another regulatory body.

In May, Sebi formally rejected the proposal to self-list, clarifying that present regulations did not allow for such an arrangement.

As shareholders continued piling on the pressure, the NSE board in a meeting on June 23 finally gave its nod to list in India and overseas. The exchange will file a draft prospectus with market regulator Sebi by January 2017 for domestic listing, and another one for overseas listing by April next year.